Two high-stakes economic decisions await Trump in the new year ahead
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Two key economic policy decisions are on the horizon in Washington: a Supreme Court ruling on tariffs and the expected announcement by the White House of the next Federal Reserve chair. Both developments have significant implications for trade, markets, and the future of U.S. monetary policy.
At the Supreme Court, two cases, which the President Donald Trump called “life or death” for the United States, have forced the nation’s highest court to question how far a president can go in reorienting American trade policy.
The lawsuits — Learning Resources Inc. v. Trump and Trump v. VOS Selections Inc. — were brought by an educational toy maker and a family-owned wine and spirits importer challenging Trump’s tariffs.
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President Donald Trump has described the tariff case before the Supreme Court as one of the most important in U.S. history. (Daniel Torok/Official White House Photo)
Both cases revolve around a central question: whether the International Emergency Economic Powers Act (IEEPA) gave the president the power to impose tariffs, or if this decision exceeded constitutional limits.
TRUMP DEFENDS TARIFFS, SAYS WE HAVE BEEN “THE KING OF VISITS” BY TRADE IMBALANCE
Tariffs are taxes that the government imposes on imported products. Even though businesses pay these taxes at the border, they often cover the additional cost by raising prices, meaning consumers ultimately bear much of the burden.
Since Trump announced drastic tariffs for “Liberation Day” in April, the total rights revenue jumped to $215.2 billion in fiscal year 2025, which ended Sept. 30, according to the Treasury Department’s report on customs and certain excise taxes.
This revenue strength continued into the new financial year. Since October 1, the government has collected $96.5 billion in duties, according to the latest Treasury statement.
Meanwhile, two candidates are vying for a role that would determine the direction of U.S. monetary policy: Kevin Hassett and Kevin Warsh.
The nomination to head the world’s most powerful central bank comes as the persistently high cost of living tests Trump’s policies. economic agenda. The Federal Reserve, which sets borrowing costs and influences inflation, remains one of the most important institutions in Americans’ daily affordability.
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The next Fed chair would take on one of the most influential positions in shaping U.S. economic policy, overseeing interest rate decisions and the central bank’s efforts to control inflation.
A side-by-side photo of Kevin Hassett and Kevin Warsh. (Anna Moneymaker/Tierney L. Cross/Bloomberg/Getty Images)
Warsh, a former Morgan Stanley banker, has become a vocal critic of the Fed’s current leadership, sharpening his attacks as he positions himself as a potential replacement for Chairman Jerome Powell. He became the youngest person to serve on the Board of Governors of the Federal Reserve in 2006.
A LOOK AT THE ONGOING BATTLE BETWEEN TRUMP AND POWELL OVER FED POLICY
Hassett is Trump’s top economic adviser and a staunch defender of the administration’s policies. He currently serves as director of the White House National Economic Council, held two senior positions during Trump’s first term and advised the president on economic policy during the 2024 campaign.
Treasury Secretary Scott Bessent, who helped put together Trump’s shortlist for the Fed’s top job, said he has known Warsh and Hassett for more than 20 years and considered them both equally qualified.
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Federal Reserve Chairman Jerome Powell is expected to finish his term in May 2026. (Official White House photo by Daniel Torok)
Trump has called for deep rate cuts and urged the Federal Reserve to bring its benchmark interest rate back to 1% to revive economic growth.
Trump’s criticism of the Federal Reserve Chairman Jerome Powell, whom he appointed to the post in 2017, has at times become personal, with the president giving the Fed chairman mocking nicknames.
Powell is expected to finish his term in May 2026, at which point the next president will take over.
