Fed drama will come to a head in 2026
thestreet.com••business
Key Points:
- In 2025, President Donald Trump aggressively raised tariffs, causing a sharp initial drop in the S&P 500 index, but it rebounded strongly by year-end with a 16.4% gain, marking the third consecutive year of double-digit growth.
- Trump repeatedly criticized Federal Reserve Chairman Jerome Powell for not cutting interest rates quickly enough and threatened to fire or even sue him, while also firing Fed Governor Lisa Cook amid allegations of mortgage fraud.
- Despite political pressure, the Fed cut the federal funds rate three times in 2025, lowering it to 3.5%-3.75%, which helped reduce Treasury yields and mortgage rates, slightly improving housing activity despite ongoing supply constraints.
- The U.S. dollar declined
