Who will be next US Fed boss? Its Waller vs Bessent vs Warsh vs Hassett in Trump-led Game of Thrones

The US Federal Reserve

US President Donald Trump is at it again! After upending the global trade order and sparking fresh tensions in the Middle East tinderbox, Trump is now gunning for a battle at home.

On target this time is US Federal Reserve Chair Jerome Powell. The mild-mannered official’s term will end in May next year. But Trump won’t have it. Frustrated over the lack of any rate cut by the US central bank, Trump told a bunch of reporters in Europe that he is looking for Powell’s replacement. The remark during the NATO summit didn’t go unnoticed.

Speculations are rife that the ‘three, four’ people shortlisted by the US President are his loyalists. Multiple media reports say that the names in the race for the top job at the US central bank include former Fed Governor Kevin Warsh, National Economic Council head Kevin Hassett, current Fed Governor Christopher Waller, and Treasury Secretary Scott Bessent.

On Wednesday, President Donald Trump once again criticised Powell, calling him "terrible" and revealing that he has "three or four people" in mind as potential successors. "I know within three or four people who I'm going to pick," Trump told reporters when asked if he is considering candidates to replace Powell. While the overall sentiment remained subdued, the US dollar dropped following Trump's remarks on Fed that fueled buzz around rate cut.

Trump has repeatedly expressed frustration with Powell for not cutting interest rates, often floating the idea of firing him or naming a new Fed chief. However, he has also backtracked on those threats, stating at the White House on June 12, "I'm not going to fire him."

Kevin Hassett refused to comment on whether he had discussed Powell’s replacement with Trump. "I think the President will choose the person that he likes, and it's not going to be Jay Powell," Hassett said during an interaction at the White House.

Some analysts view Trump's comments as an attempt to influence monetary policy through a de facto "shadow" Fed chair, even before Powell’s term ends in May 2026.

While Fed chairs have historically been protected from removal by a president except in cases of serious misconduct, Trump’s ongoing threats to fire Powell challenge that precedent. Meanwhile, Powell warned Congress this week that rising tariffs could contribute to inflation in the coming months, just as the Fed considers possible interest rate cuts.

Many believe that bringing in Powell’s successor may backfire on Trump. In case Powell is replaced, the new Fed Chair will be under immense pressure for a rate cut and tackling inflation. Apart from legal limitations, Trump’s decision to bring in a new Fed Chair will also be guided by market reactions and timing. The Fed Chair is protected by a Supreme Court ruling that says the US Federal Reserve boss can only be removed for a cause and not just any political disagreement.