Powell’s Successor May Struggle to Get Rate Cuts Trump Wants (1)

Close Federal Reserve watchers have a message for anyone who thinks the next leader of the US central bank will deliver lower borrowing costs on a silver platter: Don’t count on it.

While it’s an unlikely outcome, some investors have staked out positions in futures markets that will profit if interest rates drop immediately after Jerome Powell’s term as chair ends in May 2026. The trade has been fueled by President Donald Trump’s pledge to nominate “somebody that wants to cut rates.”

Those investors have targeted futures contracts linked to the Secured Overnight Financing Rate, or SOFR, which ...