Trump’s Fed power play: Nevada homebuyers could win big if the plan works

By Amy Groves  

Nevada News and Views

According to a new report by Brian Wesbury and First Trust Advisors, big changes could be coming to the Federal Reserve — and soon.

If President Trump’s latest move plays out, he could have enough influence to push the Fed toward his own economic game plan, maybe even as early as September.

And yes, that could mean cutting interest rates faster than Fed Chair Jerome Powell wants.

Two weeks ago, the Fed voted to keep interest rates where they are. That sounds simple, but it was anything but.

Two governors — Christopher Waller and Michelle Bowman — broke ranks and voted against holding rates steady.

Both wanted cuts, with Bowman going further and saying she wants three cuts.

This was the first time in more than 30 years that two Fed governors openly dissented from the chair in the same meeting.

And it’s not just about interest rates. It’s also about who might be running the Fed in the future.

Powell’s term as chair ends next year. The dissents are being seen as a not-so-subtle audition for his job.

Then came a surprise: Fed Governor Adriana Kugler, a Biden pick, resigned early. That opened a seat Trump can now fill.

His choice? Stephen Miran, currently chair of Trump’s Council of Economic Advisers.

If confirmed quickly, Miran could be on the Fed in time for the mid-September meeting — and would almost certainly join Waller and Bowman in voting for a rate cut.

That would put Powell in a tough spot.

Right now, he’s resisting cuts, saying tariffs could cause inflation. But critics point out he didn’t seem so worried about inflation when the Fed printed money during COVID or when taxes went up.

Behind the scenes, the Trump team is looking for Powell’s possible replacement. The list reportedly includes:

—Kevin Warsh (former Fed governor)

—Kevin Hassett (Trump adviser)

—Michelle Bowman and Christopher Waller (the recent dissenters)

—Marc Sumerlin (former Bush aide)

—James Bullard (former St. Louis Fed president)

Trump likes to keep people guessing — and competing. By floating multiple names, he can pressure candidates to align more with his economic priorities.

But there’s an even bigger reason Trump might want a strong ally at the Fed: to undo a major policy shift from nearly 20 years ago.

Back in the Ben Bernanke era, the Fed changed how it manages money in the banking system.

Instead of controlling rates by managing how scarce bank reserves were, the Fed started “quantitative easing” — pumping in so much money that reserves became abundant, and then paying banks interest to park that money.

Critics say this has caused the Fed to run massive operating losses. A new chair could push to scrap or overhaul that system entirely.

Given Trump’s record of shaking up Washington — from USAID to the Department of Education to the Census Bureau — it’s not crazy to think he might take on the Fed next.

Why It Matters in Nevada

If the Fed cuts rates, Nevadans could see mortgage rates and car loan rates drop.

That’s a big deal for a state with a fast-growing population and housing market pressures, especially in places like Las Vegas and Reno.

Lower rates could mean more homebuyers can qualify — but they could also fuel higher prices if demand spikes.

Nevada’s tourism and gaming industries could benefit too.

Lower rates can weaken the dollar, making Las Vegas more attractive for foreign visitors. On the flip side, retirees living on fixed income from savings might see lower returns.

The next two months are critical.

If the Senate moves fast and confirms Miran, the September Fed meeting could be the turning point. Add him to Waller and Bowman, and Powell may find himself outnumbered — or at least under serious pressure.

In short, Trump could soon have the votes to steer Fed policy his way. And if that happens, even the central bank — long seen as insulated from politics — might be in for a major shake-up.

We’ll know soon enough. The clock is ticking.

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Amy Groves is director of the Coalition for Housing Freedom. You can contact her at amy@nevadasfinestproperties.com.