Analysis: Trump unlikely to interfere with Fed appointments post-midterm elections, markets eye interest rate hike outlook.

Following the U.S. midterm elections, the Democratic Party secured control of both chambers of Congress, narrowing the White House’s room to influence the Federal Reserve through personnel appointments. Nominations for Federal Reserve Board governors require Senate confirmation, posing obstacles to former President Donald Trump’s plans to further reshape the Fed’s board composition. Fed Chair Jerome Powell, appointed by Trump in May, raised interest rates by 25 basis points in September against the backdrop of inflation remaining above the 2% target, marking the first monetary policy tightening in three years. While the Fed paused rate hikes at its October meeting, its post-meeting comments reinforced market expectations of another tightening in December. Some economists argue the election outcome will allow Powell to focus more on monetary policy itself. Dalip Singh, chief global economist at PGIM, projects the Fed may raise rates by a cumulative 100 basis points over the next year. However, analysts note that if Trump adjusts his policy toward Iran or abandons further tariff hikes, the actual degree of tightening may not expand after inflationary pressures ease. Powell’s term as Fed chair runs through 2030, extending beyond Trump’s current presidential term. Democratic Senator Elizabeth Warren is expected to lead the Senate Banking Committee, and Powell’s policy stances and disclosure practices may face stricter oversight.