2026 Will Be a Wild Year for Federal Reserve: Why?

2026 is expected to be a “wild year” for the US Federal Reserve, driven by the escalating tensions with President Donald Trump. The Fed landscape is evolving amidst officials' resignations, terminations, and the possibility of further removals, creating a dynamic shift in the institution's composition.

Trump vs Fed: A Turbulent Year Ahead?

According to a recent X post shared by The Kobeissi Letter, the Federal Reserve is poised to witness a turbulent year ahead. According to him, 2026 could be a rollercoaster for the central bank with Trump restructuring the officials.

The clash between Trump and the Federal Reserve centers on their differing views on monetary policy and interest rate cuts. This showdown escalated with the President pushing for cuts and threatening to fire Chair Powell over 10 times.

In the latest development within this saga, Trump has fired Fed Governor Lisa Cook, citing “sufficient reason.”  Recently, Cook has been embroiled in allegations of mortgage irregularities in Michigan and Georgia, raised by William Pulte. Consequently, Donald demanded Cook's resignation , which she denied. But now, wrapping things up, he has shared an official post on Truth Social, announcing his decision to terminate the Governor.

Another crucial event that shook up the central bank was the surprising resignation of Governor Adriana Kugler. She announced her early resignation from her term on August 1 and exited on August 8. While Kugler resigned without a proper explanation, it has cast a shadow over the central bank's trajectory and broader macroeconomic outlook.

The Federal Reserve has faced another setback as the US President nominated Stephen Miran, Chairman of the Council of Economic Advisers, to fill the remaining months of a vacant Governor seat. Miran has been advocating for a complete overhaul of the Fed's governance structure.

The next challenge awaiting the Federal Reserve is Chair Jerome Powell’s resignation . While Donald has called for his resignation multiple times for his hawkish stance on monetary policy, Powell expressed his readiness to withstand the pressure. However, the Chair recently hinted at potential rate cuts in September. It remains uncertain how this will impact the Trump-Powell feud.

Further, the President’s picks to replace Powell are also raising concerns about the central bank's future independence and decision-making autonomy. The administration is looking at 11 potential candidates, including David Zervos, Larry Lindsey, Rick Rieder, Michelle Bowman, Chris Waller, and Philip Jefferson.