The Federal Reserve will conclude its final meeting of 2024 on Wednesday, and next year will likely be Fed Chair Jerome Powell's last full one at the helm of the U.S. central bank, with his four-year term due to expire in May of 2026.

Powell's more than six years as Fed chief have been consequential, but the coming months could present new challenges as well as an opportunity to close out some unfinished business.

If he has a 2025 wish list tucked in his drawer, here's what may be on it:

CLEAR 'STOP' SIGN Powell's main mission is "completing the 'soft landing' with inflation at 2% and full employment, in what's likely to be trickier weather" with tax, tariff and immigration policies that could make the economic landscape harder to read, said Donald Kohn, a former Fed vice chair who is now a senior fellow at the Brookings Institution. For all the criticism the Powell-led Fed received for not raising interest rates quicker once inflation accelerated in 2021, the rapid rate hikes that were eventually delivered and the return of the global economy to a more normal footing after the COVID-19 pandemic have brought inflation close to the U.S. central bank's 2% target. But the job isn't done. Over the next year Powell will have to guide debate among policymakers over when to stop the rate cuts without going so far that inflation rebounds or going so slow that the job market starts to decay, all while factoring in the policies of the new Trump administration.

STABLE FISCAL ENVIRONMENT

President-elect Donald Trump has promised broad changes in tax, trade, immigration and regulatory policy that could make the Fed's job of maintaining stable prices and full employment more challenging.

With an economy likely operating at or above its potential, lower taxes or looser regulation could spark higher inflation by boosting demand and growth even further; widespread deportation of immigrants could constrain labor supply and put upward pressure on wages and prices; tariffs could boost the cost of imported goods.

But the effects won't be one-sided - higher prices for imports could weaken demand or shift consumers to local substitutes, for example - with the Fed left to try to understand the full impact of policies that may take time to enact and implement.

Determining how it all nets out for the things the Fed cares about - inflation and the unemployment rate - may be one of Powell's chief challenges for the last phase of his leadership of the central bank.

QUIET END TO QUANTITATIVE TIGHTENING The Fed's holdings of U.S. Treasuries and mortgage-backed securities exploded during the pandemic as part of its efforts to keep markets stable and support an economic recovery. Now the central bank is shrinking its balance sheet as maturing securities expire, a process known as quantitative tightening.

There's a limit to how far the balance sheet can shrink before it leaves the financial system short of reserves. All things equal, Powell and his colleagues would like the run-off to continue as long as possible, yet they also want to avoid disrupting overnight funding markets as happened in 2019.

Finding the right stopping point and deciding how to manage the balance sheet moving forward is one bit of unfinished business from the pandemic-related financial rescue that Powell needs to complete to return monetary policy to "normal."

STURDIER FRAMEWORK

Part of Powell's legacy will be tied to the changes in monetary policy strategy the Fed debated in 2019 and approved in 2020 when the pandemic had shifted the central bank's focus to fixing what was then massive unemployment. With a prior decade of low inflation as context, they adopted a new operating framework that put more weight on a jobs recovery and pledged to use periods of high inflation to offset prior inflation misses.

The approach fast grew out of step with an economy in which the labor market recovered quickly and that by 2021 showed signs of intensifying inflation.

Powell has acknowledged the changes he oversaw in 2020 were too focused on what was likely a unique set of circumstances, and a review this year will determine if the framework should be amended again.

One challenge: How to be sure the operating guidelines avoid over-committing to either of the Fed's two mandates. "If the Fed comes out of this episode with a diminished focus on employment relative to inflation, we risk returning to an environment where inflation undershoots the target and employment recoveries from recessions take longer than unnecessary," said Ed Al-Hussainy, senior global rates strategist at Columbia Threadneedle.

AVOID A REGULATORY WAR

Along with fiscal policy, the Trump administration may try to overhaul how banks are regulated, an area where the Fed has both direct responsibility as a supervisor and broader financial stability and monetary policy interests as the economy's "lender of last resort" to otherwise creditworthy financial institutions facing market strains.

Powell focused a lot of his energy as Fed chief in building relationships with members of Congress, and those ties may be important as lawmakers debate possible changes in bank regulations and the supervisory structure used to enforce them. "I suspect there are going to be some major pushes from the Trump administration to change how the federal government implements financial policy," said David Beckworth, a senior research fellow at George Mason University's Mercatus Center. "There may also be calls for reforming the Fed writ large. I hope Chair Powell ... puts the Fed in the best position possible to deal with potentially big change."

(Reporting by Howard Schneider; Editing by Dan Burns and Paul Simao)