Replacing the Fed Chair and cutting interest rates: Trump accelerates an “aggressive monetary policy” ahead of the 2026 midterms

On December 30, 2025, ahead of the Federal Reserve's review of the discount rate, Donald Trump stated that he had decided on a candidate for the next Fed Chair and expects him to lower interest rates. Trump's chief economic advisor Hassett is being considered as a potential candidate.

Against the backdrop of Trump's approval rating falling from 49% to 38% throughout 2025, primarily due to worsening economic expectations among voters who are experiencing rising credit costs, slowing consumer activity, and high turbulence in financial markets, the White House is shifting to direct intervention in monetary policy, attempting to reverse the current economic dynamics.

This change in dynamics is being shaped ahead of the 2026 midterm congressional elections, where control over the House of Representatives and the Senate will determine whether Trump can implement his economic doctrine in the second half of his term.