This evening (European time), the minutes of the November meeting of the Fed's FOMC will be published. Normally, such a publication is an important event, because it provides a fairly deep insight into the thinking of FOMC members and helps to contextualize recent monetary policy decisions. This time, however, it is different. Everything the FOMC has decided so far may be less suitable than usual for predicting the effective parts of future US monetary policy. Because the cards in the game between the government and the central bank could be reshuffled when the next US administration takes office, Commerzbank’s Head of FX Research Ulrich Leuchtmann notes.
Trump appointments promise a whole load of fun
“Immediately after taking office in January, Trump should appoint someone to succeed the current Fed Chair Jay Powell when his term of office ends in early 2026. And this designated ‘shadow chairman’ is supposed to loudly proclaim on an ongoing basis until he takes office in 2026 that he will introduce a loose monetary policy as soon as he takes office. If everyone knows that the Fed will be pursuing a loose monetary policy from spring 2026, the effect will be very similar to a loose monetary policy today.”
“There could be a residual uncertainty. Will Congress actually confirm the “shadow chairman”? Will he be able to assert himself within the Fed from the outset or will there be resistance from the governors and regional Fed presidents? Or will the shadow chairman possibly mutate from a monetary dove to a hawk when he takes office? We have seen such sudden transformations in the past.”
“Two points remain that I take from Bessent's nomination: 1. Bessent is by no means the conventional candidate that some would like to see in the role. He is potentially disruptive. 2. Even without Congress formally amending the Federal Reserve Act, there is sufficient scope for the US government to damage the Fed's independence. The strength of the US dollar with which the currency market has acknowledged the election of Trump as the next US president is therefore at the very least bold.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.