When Will Trump Name New Fed Chair? What To Know As He Eyes Powell Successor
Almost a year before Federal Reserve Chairman Jerome Powell's term is due to expire, President Donald Trump appears to be closing in on Powell's replacement, underscoring the butting of heads between the White House and the largely independent U.S. central bank.
Donald Trump, left, and Jerome Powell are at odds over interest rates. Getty Images
Trump has discussed naming Powell's successor by September, October or even sooner, The Wall Street Journal reported Thursday evening, citing anonymous sources.
That is at least seven months before Powell's term as lead monetary policymaker is due to expire May 15, 2026, a seemingly extended amount of time for Powell to be a 'sitting duck.'
Limited recent history suggests such an early announcement is rare.
Among the only five Fed chairs of the last four decades, Paul Volcker was named a month before taking over in 1979, Alan Greenspan was named two months before taking over 1987, Ben Bernanke was named six months before taking over in 2006, Janet Yellen was named three months before taking over in 2014 and Powell was named three months before taking over in 2018.
Though Trump appointed Powell during his first Oval Office run, Trump quickly soured on the Fed boss over his consistent demands for growth-focused and politically popular interest rate cuts. This year, Trump teased firing Powell, a move with shaky legal footing, before pivoting to name calling, calling Powell 'stupid' and a 'numbskull.' The Fed's most prominent role is setting the target federal funds rate, which only officially determines the rate at which financial institutions borrow from one another in overnight transactions, but heavily influences lending costs across the economy. The Fed sets interest rates based on its dual mandate system to keep inflation moderate and maximize employment among Americans. As inflation ravaged the global economy, the U.S. central bank hiked rates to a two-decade high by 2023, but began lowering rates in 2024 as inflation moderated. The Fed has not lowered rates since December 2024 even as inflation data appears moderate, pointing to the potential of higher inflation under Trump's tariffs. What Is A Shadow Fed Chair?
On the 2024 campaign trail, now Treasury Secretary Scott Bessent planted the seed of a 'shadow' Fed chair, the already named successor to Powell who could undermine a still seated Powell by sharing their monetary policy stances. Bessent told Forbes he supported naming Powell's replacement to 'get forward guidance and let everyone know who the Fed chair is going to be.' A shadow Fed chair would 'serve one purpose: To undermine the credibility of the current Fed,' cautioned Sevens Report Founder Tom Essaye in a recent note.
Trump told reporters Wednesday he's down to 'three or four' candidates to replace Powell. The Journal identified Kevin Warsh, a former Fed governor who has criticized Powell, and Kevin Hassett, the director of Trump's National Economic Council, as leading candidates. Bessent, former World Bank boss and Trump administration official David Malpass and Fed Governor Christopher Waller, who recently spoke in favor of rate cuts, are also in the mix, according to the publication. According to the Polymarket prediction platform, Warsh is the leading candidate to be the next Fed chair with 22% odds, followed by Waller at 21%, Hassett at 18% and Bessent at 13%. Forbes Can Trump Fire Jerome Powell? Federal Reserve Chair Thinks No As President Reportedly Eyes His 'Termination.' By Derek Saul Forbes The Fed Opts Not To Cut Interest Rates Again—Even As Trump Ups Attacks On Fed Boss Powell By Derek Saul
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