President Donald Trump isn't done talking about interest rates, and he definitely isn't done criticizing Jerome Powell. Speaking in Iowa on Tuesday, Trump went after the Federal Reserve chair once again, this time doubling down on his promise that things will look very different once Powell's term ends in May.

Too Late, Too High, Too Powell

Trump pulled no punches during his remarks, labeling Powell as someone who's perpetually behind the curve. "We call him too late. He's too late," Trump said, suggesting the Fed chair has been sluggish and indecisive when it comes to making monetary policy moves.

But Trump went further than just criticizing Powell's timing. He accused the Fed chair of deliberately maintaining elevated borrowing costs, claiming Powell "wants to keep rates as high as possible." Despite this alleged obstruction, Trump insisted his administration managed to bring "rates down" anyway.

Looking ahead to Powell's departure in May, Trump teased that the country would soon have a "great Fed chairman," with the announcement coming "pretty soon." And here's the kicker: Trump promised that federal interest rates will "come down a lot" under whoever he picks.

The Timing Is Interesting

Trump's comments arrived just ahead of Wednesday's Federal Open Market Committee meeting, where the consensus expects rates to stay put. According to the CME Group's FedWatch tool, there's a 97.2% probability that rates remain unchanged at this meeting.

So Trump is essentially setting expectations for a more dovish Fed under new leadership, even as the current Fed appears comfortable holding steady for now.

The Race for Fed Chair

Trump confirmed last week that he's already made his decision on Powell's replacement, though he's keeping the name under wraps for now. Naturally, prediction markets have jumped into action to handicap the race.

According to Kalshi prediction markets, Rick Rieder, the Chief Investment Officer of Global Fixed Income at BlackRock Inc. (BLK), has emerged as the clear frontrunner. Rieder currently sits at 51% odds of landing the top job.

Former Federal Reserve Governor Kevin Warsh comes in second but at a distant 27%. Kevin Hassett, the Director of the National Economic Council, trails further behind at just 7%.

The markets are clearly pricing in Rieder as the likely choice, though Trump's penchant for surprises means nothing is certain until he makes the formal announcement.

What This Means for Markets

The ongoing drama around Fed leadership and interest rate expectations continues to influence Treasury markets. The iShares US Treasury Bond ETF (GOVT), which tracks U.S. Treasuries, was down 0.11% on Wednesday, closing at $23.04.

According to market analysis, the fund has shown an unfavorable price trend across short, medium, and long-term timeframes, reflecting broader uncertainty in the bond market as investors digest what a potential leadership change at the Fed might mean for monetary policy going forward.

With Powell's term ending in just a few months and Trump promising a dramatically different approach to interest rates, markets will be watching closely for any hints about who the next Fed chair will be and what their policy priorities might look like.