What Will the Federal Reserve Look Like in 2026?

Key Takeaways Federal Reserve Chair Jerome Powell's leadership term will expire in 2026, providing an opportunity for President Donald Trump to nominate a candidate who would be more favorable to interest rate cuts. The rotation of regional bank president voters isn’t seen as meaningfully changing the Fed’s path on interest rates. Significant changes are anticipated for the Federal Reserve in 2026-but they're not guaranteed to change the path of interest rates. The Federal Reserve is likely to see new members join its board in 2026.SAUL LOEB / AFP via Getty Images Jerome Powell’s term as the chair of the Federal Reserve’s Board of Governors is set to expire in May 2026 and President Donald Trump is already looking for a new leader of the central bank. The president has clashed with Powell publicly in the past year, and economists have been concerned that Trump is looking to interfere with the Fed's independence . Openings on the Federal Reserve Board will potentially allow President Trump to appoint members who are more likely to support his position, which favors aggressive interest rate cuts . Why This Matters for the Economy The Federal Reserve’s regulation of interest rates can have a significant impact on the economy, affecting the cost of mortgages, car loans, and credit card debt. Its policies help maintain stable prices and employment, shaping the overall cost of living and health of the labor market. So far, White House Economic Adviser Kevin Hassett has emerged as the front-runner for the position, though there are questions about which spot at the Federal Reserve he could fill. Other possibilities for the role include current Federal Reserve Governors Christopher Waller and Michelle Bowman, as well as former Fed Governor Kevin Warsh and BlackRock Senior Managing Director Rick Rieder. Will Powell, Miran, and Cook Stay in 2026? One question is whether Powell will stay on the board after his term as chair ends. Powell’s term on the board of governors doesn’t expire until 2028, which means Powell could stay as a voting member of the Federal Open Market Committee (FOMC) , even if he isn’t leading the meetings. Traditionally, Fed chairs leave the board after their leadership term expires, but Powell hasn’t said whether he intends to remain on the board. There’s also the question of what will happen with current board member Stephen Miran, whose term ends in January 2026 . Miran has consistently advocated for aggressive interest rate cuts during his term on the board. He is serving the remaining term of former Governor Adriana Kugler and could return to his role as chairman of the White House Council of Economic Advisers, which he left to take the short-term appointment as a Fed governor. The board makeup could change even further if Trump is able to successfully fire Governor Lisa Cook , who is challenging the president’s attempts to remove her from her position in court. Wells Fargo economists rated Cook as more likely to support interest rate cuts, so Trump’s moves to...

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