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Has Powell "turned the tables"? The 2025 showdown between Trump and the Federal Reserve has just begun
【BlockBeats】Things are getting interesting. After the Department of Justice launched an investigation into Federal Reserve Chair Jerome Powell, the situation has turned in the opposite direction of Trump’s expectations.
Originally seeming certain to resign, Powell’s chances of remaining in office are now increasing. Data from the prediction market Polymarket vividly reflects this change—Powell’s probability of leaving the Fed before May 30 has dropped from 74% at the beginning of the month to 45%, and the likelihood of his departure before the end of the year has decreased from 85% to 62%.
Even more dramatically, the ranking of candidates for Federal Reserve Chair is being reshuffled. Trump ally Kevin Hasset was initially leading, but support for the more hawkish Kevin Waugh has begun to surpass him. This means that even if Powell does step down, his successor might be more hawkish than Trump expects.
According to policy analyst Dan Cliffton, there was an informal agreement between Trump and Powell last summer: Powell would resign this May, and Trump would drop his criticism of the Fed’s headquarters renovation project. Trump did ease up at the time, and the agreement seemed to take effect. But last Sunday, that bottom line was broken—Trump reignited personal attacks on Powell, which instead increased the likelihood of Powell remaining as a regular board member.
It appears that Trump’s pressure to accelerate Powell’s resignation has backfired. In 2025, the game between Trump and the Federal Reserve is just entering a truly deadlocked stage.