Here is the breakdown of what is actually happening right now with the Federal Reserve and President Trump:
1. The Fed Kept Rates Steady Today
The Federal Reserve (FOMC) concluded its first meeting of 2026 earlier today. As widely expected, they held interest rates in the 3.5%–3.75% range. Jerome Powell held a press conference shortly after to explain the decision, emphasizing that they are staying cautious despite pressure to cut rates.
2. The Trump vs. Powell Feud
The "announcement" rumors are rooted in a very real and public conflict:
Criminal Investigation: Jerome Powell is currently under a Justice Department investigation regarding $2.5 billion in renovations at the Fed headquarters. Powell has publicly called these subpoenas "pretexts" meant to punish him for not lowering interest rates.
Replacement Rumors: Powell’s term as Chair ends in May 2026. President Trump has been very vocal about replacing him "in the not-too-distant future," recently mentioning in Davos that he has narrowed his list of successors down to one or two candidates (with names like Kevin Hassett being floated).
3. Market Reaction
The market is definitely showing the "heightened volatility" you mentioned:
The Dollar: The US dollar has dropped to its lowest level in four years today.
Safe Havens: Gold and silver prices have surged as investors get nervous about the Fed's independence and potential political interference.
Equities: While the S&P 500 hit record highs earlier this week, traders are now in a "wait-and-see" mode regarding the Chair appointment.