Eric Rosengren

The big beautiful bill included investment credits that encourage investment and also has lower taxes for helping consumers out.

So I think the conditions for reasonable growth next year are there.

And so as long as that actually pans out, there's really no reason for the Fed to change the level of rates.

There has been sort of a parlor game going on right now in financial markets, the idea that one way or another, we are going to see more accommodative policy out of the Fed this year, largely because of the political

of factors here, whether it is the formal replacement of Jay Powell at his expected departure date later this year in May, or maybe potentially sooner than that.

But just overall, the idea that you have a White House that seems emboldened in its desire to continue jawboning where it thinks monetary policy should go.

Eric, I know I heard from all these former Fed members that say, look, you go into that room, you focus on the data, not the politics going on down the street out of the White House.

This just feels a little bit different.

here in 2026, though.

Well, I agree with the commentators that have said that the Fed tends to focus on the data.

But it does matter who's in positions to make the decisions.

And so Jay Powell's term ends in May.

And assuming that the administration comes up with someone to replace Jay and that person gets Senate confirmation, the administration's made clear that they're not going to appoint somebody

who doesn't believe that interest rates should drop quite significantly, which has been clearly expressed by the president.

So I think most of the optimism for interest rates coming down assumes that it's going to happen in the second half of the year when there's a new Fed chair in place.

It's still a committee decision.

Whoever gets picked has to have enough credibility.

and has to have strong enough arguments that he convinces a majority of the FOMC to vote their way.

So it's still not a slam dunk, even with a new Fed chair, that rates actually decline, particularly if the administration's jawboning and potential legal challenges raise concerns about Federal Reserve and independence.

and make some of the voting members want to be sure that the economic conditions justify a move.