Tensions between Donald Trump and Federal Reserve Chair Jerome Powell are heating up again. With Powell’s term set to end in May 2026, Trump is reportedly thinking about announcing a replacement much earlier.
According to Wall Street Journal journalist Nick Timiraos, Trump is frustrated with how slowly the Fed is cutting interest rates. However, naming someone too early could backfire, as that person might face more public pressure and be less likely to get the job in the end.
While Trump hasn’t officially named his pick, he said during a NATO summit press conference that he’s narrowed it down to “three or four people.” Among the top contenders are known Trump loyalists: Kevin Warsh, Kevin Hassett, Chris Waller, and David Malpass. Additionally, Scott Bessent is being pushed as a strong candidate. These candidates are seen as more likely to support Trump’s push for faster rate cuts and stronger economic growth.
Even though Trump has hinted at firing Powell, it’s not that simple. A recent Supreme Court ruling confirmed that the Fed operates differently from other government agencies, which means Powell’s job is more secure. During his first term, Trump also thought about removing Powell but backed off after markets reacted badly. This time, he’s been more open, even posting online that he “might change [his] mind” about firing him.
The disagreement between Trump and Powell mainly revolves around interest rates and inflation. Trump wants the Fed to cut rates to help the economy grow, but Powell is holding firm, saying Trump’s tariff plans could drive up prices. With only 11 months left in Powell’s term, the decision on who leads the Fed next could have a big impact on the U.S. economy, especially if Trump returns to the White House.
In short, Trump wants change at the top of the Fed, but legal limits, market reactions, and careful timing could make that tricky.
No, it’s not simple. A Supreme Court ruling implies the Fed Chair’s job is secure and they can only be removed “for cause,” not political disagreement.
Trump wants faster interest rate cuts for economic growth, while Powell prioritizes stable prices, citing concerns that Trump’s tariffs could fuel inflation.
Announcing a replacement too early could increase public pressure on the nominee and potentially jeopardize their eventual confirmation for the role.
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