Analysis: The next Federal Reserve Chair will face an extreme stress test, with rate cuts, tariffs, and inflation contradictions frequently happening.

December 5 — The next Federal Reserve chair for President Trump’s administration has long faced a string of daunting challenges: navigating a cautious financial market, parsing opaque economic indicators, managing internal factional fights at the central bank, and pushing back against a president who’s repeatedly pressed for rate cuts this year. Yet as the final candidate pick nears, Trump has ratcheted up pressure on Powell’s successor: pushing for policies that could stoke inflation while still demanding the Fed declare victory over price spikes. He’s also dead-set on keeping his tariff regime, which has already raised costs for a wide range of goods. What’s more, the U.S. will enter high-stakes trade talks with Canada and Mexico next year. These moves will keep testing the Fed’s core view that tariffs only cause one-time price hikes, not a prolonged, harder-to-tame inflation cycle. The next Fed chair’s job is growing increasingly precarious, and whoever takes the role will struggle to navigate these tensions — even Kevin Hassett, Trump’s long-time advisor and current front-runner, isn’t immune. For a credible Fed chair, how closely their statements toe the Trump administration’s political line may be constrained. Advocating for rate cuts, touting “exceptional” economic performance, and denying tariffs drive inflation — this trio of claims is clearly contradictory.