My December Prediction Came True

by | Apr 29, 2026 | Uncategorized

My December Prediction Came True-Real Estate Investment Strategies


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My December Prediction Came True

Welcome to the Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce.

A game of chess is playing out in the headlines as we speak. On December 10th of last year, I published an episode that covered some scenarios involving the Federal Reserve and the transition of power.

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On today’s show, the Federal Reserve Open Market Committee concluded two days of meetings and a press conference. They chose to keep the policy rate unchanged, but there were four dissenting votes. I’m not going to get into the details of the arguments on both sides. We know the Fed has a dual mandate to keep inflation low and to maximize employment.

Newly revised job stats show the U.S. economy lost 54,000 jobs a month in the third quarter of last year. That’s in stark contrast to the glowing headline numbers showing lots at the same time. Viewed through that lens, you could make the argument that they should have been cutting rates more aggressively in order to respond to the weak job market.

On December 10th of last year, I published an episode of the podcast that summarised the rules of how the Federal Open Market Committee elects their Chair. The Federal Reserve Act requires the Fed Chair to be elected in the January meeting for the balance of the year.

Now, it’s been customary for the Fed Chair to resign their position as Fed Chair and to relinquish their seat on the Board in order to create space for the incoming Chair to take their seat on the Committee. While on December 10th I made it clear that the Committee has followed the custom of electing a new Chair in January and then, after resignation of the Chair, make way for the new Fed Chair to take their seat.

While unprecedented, the current Fed Chair, Jerome Powell, would not be required to resign, and it would, in fact, require a change in the Federal Reserve Act by both the Congress and the Senate in order to force the Fed Chair to resign. In that episode, I put it forward that this was a distinct possibility.

Well, as fate would have it, today Fed Chair Jerome Powell announced that he would not be stepping down and that he would only do so when he felt conditions were right to protect the integrity and the independence of the Federal Reserve as a whole.

Jerome Powell’s decision to remain on the FOMC past the end of April, rather than stepping aside to accommodate the incoming Chair, Kevin Worsh, reflects a deliberate emphasis on institutional continuity over political optics.

Now, this is a direct fight with the White House. The White House did drop the investigation against Powell personally. However, there’s no assurance that a subsequent criminal investigation might not be opened in the future. So, Powell is saying, clearly, I’ll give you what you want, which is to get your guy in charge of the Fed, and I won’t get in the way, but these are my terms.

At the core, the decision reinforces the Federal Reserve’s long-standing norm of independence and keeping it away from political pressures. By serving out the remainder of his term in an orderly fashion, Powell signals that the leadership transitions at the Fed are governed by structure, and by mandate, not by convenience, coercion, or external expectations.

This is particularly relevant in a period marked by heightened macroeconomic uncertainty, especially where these markets are highly sensitive to any perceived disruption in policy continuity. The statement was couched to focus on Fed independence and putting the needs of the U.S. citizens ahead of anything else.

But from a policy standpoint, Powell’s continued presence ensures the current trajectory of monetary policy which, related to interest rate positioning, size of the balance sheet, inflation target, remains consistent during that transition period.

There’s also a governance dimension. The FOMC operates as a committee with collective decision-making authority. Powell’s participation ensures that the institutional knowledge accumulated over his tenure remains embedded within near-term deliberations. That’s particularly valuable if the incoming Chair brings a different policy bias or communication style.

Now, the overlap period allows for implicit calibration between outgoing and incoming leadership without forcing an immediate shift in the regime. At the same time, Powell is clearly signaling the President the terms under which he gets to appoint his new Chair.

This is a high-stakes game of chess, and it will continue to make headlines, probably for days and weeks to come. Stay tuned. As you think about that, have an awesome rest of your day. Go make some great things happen, and I’ll talk to you again tomorrow.

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