President Donald Trump is ramping up efforts to replace Federal Reserve Chair Jerome Powell, signaling he may announce a successor as soon as September or October 2025—months before Powell’s term officially ends in May 2026. This move, reported by The Wall Street Journal, would break with tradition and could significantly impact U.S. monetary policy.
A Shortlist of Contenders
Trump has publicly criticized Powell’s leadership, blaming him for high interest rates and their impact on the U.S. economy. “I know within three or four people who I’m going to pick,” Trump told reporters, calling Powell “terrible” and “a very stupid person.” Among those reportedly under consideration are:
-
Treasury Secretary Scott Bessent
-
Former Fed Governor Kevin Warsh
-
National Economic Council Director Kevin Hassett
-
Fed Governor Christopher Waller
-
Former World Bank President David Malpass
Market Reaction and Policy Disputes
News of Trump’s accelerated timeline has already affected financial markets. The U.S. Dollar Index has dropped to a three-year low, and the yield on 10-year Treasury notes has slipped as investors anticipate that a new Fed chair could usher in lower interest rates.
The core of the dispute lies in the Fed’s current interest rate policy. Rates remain between 4.25% and 4.5%. While Powell has indicated that rate cuts may be possible later this year, he has also warned that Trump’s proposed tariffs could fuel inflation. “We do expect tariff inflation to show up more,” Powell recently told lawmakers.
Legal and Historical Context
Trump previously considered firing Powell during his first term but ultimately decided against it after markets reacted negatively. A recent Supreme Court decision has reaffirmed the Fed chair’s legal independence, making it difficult for a president to remove the chair over policy disagreements.
Despite his criticism, Trump has stated he has “no intention” of firing Powell before his term ends. However, by considering an early announcement of Powell’s successor—a so-called “shadow Fed chair”—Trump is taking an unprecedented step to influence central bank policy and market expectations.
Let me know if you’d like this article tailored for a specific publication or audience!