Market Analysis: The Federal Reserve (FED) interest rate decision may be overshadowed by the "Shadow Chairman of the Fed".

On June 16, Luca Pesarini, an analyst at Ethenea, said in a report that the Federal Reserve’s meeting this week will not be remembered because of the path of interest rates, but more of a test of the independence of the central bank. “The real challenge is not the conflicting economic data, but the political intervention in monetary policy communication,” Pesarini said. Trump previously announced that he would soon appoint a successor to Fed Chair Jerome Powell, nearly a year before Powell’s term expires. This brings the concept of a “shadow chairman” into focus. If the news is announced, Pesarini said, there is a risk of conflicting monetary policy signals between Fed officials and the designated successor, especially if the latter openly pushes for interest rate cuts.