Markets expect US Fed to adopt more dovish stance if Powell leaves office — Reuters

Disagreements between US President Donald Trump and Federal Reserve Chairman Jerome Powell over future monetary policy continue to intensify. While the Fed remains cautious, markets expect the central bank to be more aggressive in cutting interest rates. Powell's term as Fed Chair is coming to an end next year. Investors hope that a more dovish official will replace him, Reuters reports.

According to new economic forecasts published last week, the Fed intends to cut borrowing costs in the United States three times through December 2026, with each cut amounting to 25 basis points. Meanwhile, markets expect a 125-basis-point reduction in rates over the same period. Donald Trump is also pushing for more aggressive monetary easing.

The news agency says the final call on replacing Powell as Fed Chair has not been made yet, and probably will not be up for discussion anytime soon. But, considering how his and Trump's views on the country's monetary conditions differ, this outcome is quite likely, Reuters concludes.