So, the final showdown between Donald Trump and the Federal Reserve may be set for 2026. In 2025, the U.S. president suffered a complete defeat in this battle, but perhaps he did not aim to defeat the central bank so quickly. Let's recall that the FOMC consists of 12 voting members. From time to time, they are replaced by other committee representatives who do not have voting rights. Accordingly, all Trump needs to do is establish control over half of the committee.

In 2025, he managed to sway at least three FOMC members to his side: the newly appointed and temporary Stephen Miran (who replaced Adriana Kugler), Christopher Waller (whom Trump promised to consider for the position of Fed president), and Michelle Bowman (who is a Republican by party affiliation and views). Now, it remains to find three more votes.

In May next year, Jerome Powell will retire, and Trump will nominate a candidate for the vacant position, which will undoubtedly be approved by the "Republican" Congress. In total, this would give him 4 of the 6 necessary votes. Removing Lisa Cook did not succeed, so Trump will likely continue to seek compromising information on all "hawks" or "neutral" governors. Alternatively, the problem may resolve itself more easily if one of the unaligned governors swaps places with another politician who supports lowering interest rates. As I mentioned, the right to vote at FOMC meetings sometimes shifts from one governor to another.

When Trump establishes control over the Fed, two things will happen. A sharp reduction in interest rates, at whatever level they are set (which will be a significant reason for the dollar to decline), and a sharp decrease in investor confidence in the Fed, which could lead to the same drop in the dollar. In this scenario, market participants will understand that Trump will now be calling the shots. Today, he deems it necessary to lower rates to near zero, and tomorrow, he may decide to raise them. Investors dislike uncertainty; they prefer stability and confidence in the future. Thus, demand for the U.S. currency in 2026 may hit new lows, allowing Trump to boost investments in the economy and GDP growth (due to the Fed's easing policy) and increase exports through a cheaper dollar.

Wave Analysis for EUR/USD:

Based on the conducted analysis of EUR/USD, I conclude that the instrument continues to build an upward section of the trend. Over the last few months, the market has paused, but Donald Trump's policies and the Federal Reserve's remain significant factors in the future decline of the American currency. The targets of the current trend section may extend to the 25th figure. Currently, construction of corrective wave 4 continues, taking on a highly complex, elongated form. Its latest internal structure—a-b-c-d-e—is close to completion or has already been completed. Therefore, I am once again considering long positions with targets set around the 19th figure.

Wave Analysis for GBP/USD:

The wave picture for the GBP/USD instrument has changed. We are still dealing with an upward, impulsive section of the trend, but its internal wave structure is becoming more complex. Wave 4 has taken a three-wave form, and its structure appears to be very elongated. The bearish corrective structure a-b-c-d-e in c in 4 is presumably nearing completion. I expect the main wave structure to resume building with initial targets around the 38 and 40 figures.

Key Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade, as they often lead to changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is never 100% certainty in the direction of movement. Always remember to use protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.