Donald Trump eyes new Fed Chair as he calls for Jerome Powell's ouster
The President, who has for months attacked the Federal Reserve Chair as 'stubborn,' signalled Tuesday that he is weighing a list of candidates to succeed Powell and may act soon. 'I didn't say I'm making a decision right now,' he told CNBC. But for anyone watching, the intent was clear: Trump wants Powell gone.
Trump has long accused the central bank chief of refusing to lower interest rates in the face of economic slowdown and his own trade war. On Friday, after another disappointing jobs report, he went further, calling on the Fed's board of governors to override Powell. 'THE BOARD SHOULD ASSUME CONTROL,' Trump wrote on Truth Social, 'AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!'
The President's frustrations have coincided with a string of economic data that has not gone his way. Friday's nonfarm payrolls report showed just 73,000 jobs added in July – far below expectations – and included downward revisions of 258,000 for the previous two months.
Hours later, Trump fired Erika McEntarfer, the commissioner of the Bureau of Labor Statistics, blaming her for 'the biggest miscalculations in over 50 years.'
The move stunned economists. 'The risk of politicising the data collection process should not be overlooked,' warned Michael Feroli, JPMorgan Chase's chief US economist. 'Having a flawed instrument panel can be just as dangerous as having an obediently partisan pilot.'
But if Trump is steering, he's also reshaping the cockpit.
The resignation of Federal Reserve Governor Adriana Kugler, announced Friday, gives Trump a new opening. Kugler's term was set to run until January, but her early departure, combined with McEntarfer's firing, leaves Trump with two powerful vacancies to fill. And he's made it clear he knows the stakes.
The Kugler vacancy, wrote Krishna Guha of Evercore ISI, 'jump-starts the Trumpification of the Fed by handing President Trump a vacancy into which he can place a potential or even a clearly designated successor to Powell as Fed chair.'
Trump has hinted as much himself—saying his nominee for Kugler's post could well be the next chair when Powell's term expires in May 2026. He's also floated the possibility of pushing Powell out sooner, a move that would draw legal and political fire but has not been ruled out.
Trump also ruled out Treasury Secretary Scott Bessent—'He's doing a great job, and he wants to do what he's doing'—but said he is evaluating 'Kevin and Kevin,' referring to former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett. 'Both Kevins are very good,' Trump said.
Two sitting Fed governors, Christopher Waller and Michelle Bowman, have already broken with Powell on interest rate policy. After Friday's meeting, both issued statements pushing for rate cuts and arguing that Trump's tariffs had only a one-time effect on inflation.
Yet the Fed has held interest rates steady through 2025, and Powell has so far resisted Trump's repeated public pressure. The next chance for a rate cut comes in September.
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