Donald Trump is privately mulling naming a successor to Fed Chair Jerome Powell well before his term ends next May, as the president continues to grow frustrated with the Federal Reserve’s pace on interest rate cuts.
According to an exclusive Wall Street Journal report, the president is considering several potential nominees – including former Fed governor Kevin Warsh, Treasury Secretary Scott Bessent, World Bank President David Malpass, and current Fed governor Christopher Waller.
“In recent weeks, the president has toyed with the idea of selecting and announcing Powell’s replacement by September or October, according to people familiar with the matter,” the Journal reported Wednesday. “One of these people said the president’s ire toward Powell could prompt an even-earlier announcement sometime this summer.”
While insiders say the move could influence investor expectations surrounding interest rates, it could also backfire.
“The earlier Trump names his pick, the bigger the bull’s-eye on that person’s back, and the less likely that that person is the actual successor to Powell,” economist and policy consultant. Douglas Rediker told the Journal.
Bessent had previously floated the idea of naming a “shadow chair” to bypass Powell, but he later scrapped that idea after his mentor, billionaire investor Stanley Druckenmiller, called it “a horrible idea and irresponsible.”
Trump has made no secret of his disdain for Powell.
“I know within three or four people who all I’m going to pick,” Trump told reporters during a NATO summit news conference. “He goes out pretty soon, fortunately, because I think he’s terrible.”
Still, replacing Powell will be no easy task, the Journal noted.
“Fed policy is set by a committee of 12 policymakers, a majority of whom Trump won’t be able to pick unless sitting governors leave their seats early,” the publication pointed out. Powell could also remain on the board through 2028 – even if he’s no longer chair.
