As Jerome Powell’s term as Chair of the U.S. Federal Reserve nears its May 2026 end, all eyes are on President Donald Trump, who has made no secret of his dissatisfaction with the current Fed chief. Trump has repeatedly criticized Powell — calling him “terrible” and “stupid” — and is expected to nominate a more dovish successor in the coming months, with speculation mounting that an announcement could come as early as September or October according to The Wall Street Journal, .
According to Media Reports, Trump is considering at least four potential candidates to lead the central bank into a new era of monetary policy. The shortlist reportedly includes former Fed Governor Kevin Warsh, National Economic Council Director Kevin Hassett, U.S. Treasury Secretary Scott Bessent, and current Fed Governor Michelle Bowman. Among them, Bowman has drawn praise from the American Bankers Association for being a “thoughtful, principled voice for sensible regulatory policy.”
Market Impact Already Visible
The uncertainty surrounding Powell’s replacement — and expectations that the next Fed Chair may pursue rate cuts more aggressively — has already rattled currency markets. The U.S. dollar index dropped 0.5% following news of Trump’s intentions, hitting its lowest level since early 2022. Traders are now pricing in 65 basis points of rate cuts by the end of 2025, up from 46 basis points just days ago.
Economy Slips, Dollar Slides, Rate Cut Bets Rise
Fueling the shift in sentiment is a surprise contraction in the U.S. economy. Revised Q1 2025 data from the Bureau of Economic Analysis showed GDP shrank by 0.5%, marking the first quarterly decline since 2022. With inflation cooling and economic growth faltering, many expect the next Fed Chair to lean toward monetary easing.
The dollar’s ongoing decline — already down 10% this year — has led to a surge in alternative currency settlements, with global exporters increasingly favoring euros, yuan, and pesos over the greenback. This shift aligns with recent survey findings from OMFIF, where central banks signaled plans to diversify away from the dollar and increase their gold reserves.
On the other hand UBS says gold prices may touch 3500 Dollar Till Year End.
UBS Chief Investment Office view: The OMFIF survey underlines our view that demand for gold among central banks is likely to remain robust. Although gold has retreated from record highs in recent weeks, we continue to see gold as an attractive source of diversification. Our base case is for the metal to end the year trading around USD 3,500 an ounce, compared to USD 3,325 an ounce at present. Regarding the US dollar, we expect sustained US policy uncertainty to erode the belief in US exceptionalism. We recommend using near-term dollar strength to reduce excess US dollar cash by investing or diversifying into other currencies such as the yen, euro, pound, and Australian dollar. International investors should also review their strategic currency allocations and consider hedging US dollar exposure in US assets back into their home currencies.
A Pivotal Decision for Global Markets
Who Trump selects as the next Federal Reserve Chair will have wide-reaching implications for interest rates, inflation, and investor sentiment. With financial markets already reacting to the mere possibility of a leadership change, the formal nomination will be closely watched by Wall Street and central banks worldwide.
As Trump signals his intent to chart a new course for U.S. monetary policy, the key question remains: Will the next Fed Chair follow Powell’s path, or mark a major shift toward looser, more politically-aligned monetary policy?
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Disclaimer:
The information provided in this article is for informational purposes only and reflects the views of industry experts. Before making any investment decisions, it is recommended that you consult a financial advisor. The team at Gold Price Today does not engage in personal buying, selling, or trading of gold or silver on exchanges. We are not responsible for any gains or losses incurred based on the information presented here.
