Trump May Dismiss Jerome Powell as Fed Chair Decision Approaches
President Donald Trump hinted at having a favored candidate for the next chair of the Federal Reserve, yet he expressed no urgency in making an announcement. He also contemplated the possibility of dismissing the current leader of the central bank, Jerome Powell. “I do, still do — hasn’t changed,” Trump stated on Monday, in response to a question about whether he has a favorite candidate. “I’ll announce him at the right time. There’s plenty of time.” Trump stated that Powell “should resign” and expressed that he’d “love to fire him.” The president nearly pursued Powell’s removal in July, but retreated following an unfavorable response in financial markets. “Maybe I still might,” Trump stated. Trump did not specify who his leading chair candidate is and stated that an announcement would be made in “January sometime.”
National Economic Council Director Kevin Hassett has emerged as the leading candidate, although Trump has also shown interest in former Fed governor Kevin Warsh. Other finalists in the process have included current Fed governors Christopher Waller and Michelle Bowman, along with BlackRock’s Rick Rieder. Trump has issued a series of cryptic — and at times contradictory — statements concerning his decision-making process related to the new central bank chief. The president earlier in December stated that he had narrowed the pool of contenders to one. However, he later indicated that he was contemplating multiple candidates and has expressed admiration for several names on the short list.
Trump has consistently criticized Powell, whom he appointed to lead the central bank during his first term. The president has expressed a desire for the next chair to take a more assertive approach in cutting interest rates, as the White House aims to reduce mortgage costs. The central bank has reduced interest rates during its last three meetings; however, officials indicated in December that they are expected to implement only one rate cut in 2026.
On Monday, Trump stated that he was contemplating a lawsuit against Powell for “gross incompetence” in connection with a current renovation project at the Fed. Powell’s term as chair is scheduled to conclude in May of 2026, while his tenure on the Fed’s Board of Governors will continue until 2028. Powell has not indicated whether he plans to leave once his term as chair concludes. If he remains, Powell would prevent Trump from appointing another new member to the Fed board.
