Former President Donald Trump has made it clear that he wants to remove or sideline Federal Reserve Chair Jerome Powell, a move that could have major implications for interest rate policy. Trump has long favored lower interest rates to boost economic growth and market performance, even when inflation was rising. If he returns to office and replaces Powell with someone more aligned with his views, the Fed could shift toward easier monetary policy regardless of economic conditions.

Lowering interest rates might offer short-term economic boosts, like cheaper loans and a stronger housing market, which could be politically beneficial. However, such a move could also risk reigniting inflation and weakening the Fed’s credibility. The prospect of politicized rate decisions could unsettle investors and shake global confidence in the independence of U.S. monetary policy.