US President Donald Trump is weighing whether to name a successor to Federal Reserve Chair Jerome Powell as early as this summer, in a sharp break from tradition that could give him more sway over monetary policy before Powell’s term ends in May 2026. The move comes amid Trump’s growing frustration with the Fed’s cautious approach to cutting interest rates, despite his push to stimulate growth and curb inflation fears tied to his new tariffs, the Wall Street Journal reported.
According to multiple people familiar with the matter, Trump has floated the idea of naming his choice by September or even earlier. Such a move would effectively create a “shadow chair” who could shape investor expectations and publicly criticize Powell’s actions before formally taking over. Powell, who has sought to shield the Fed from political interference, has reiterated that rate cuts remain possible but warned against acting too quickly.
Trump’s short list takes shape
Among the top contenders to replace Powell are former Fed governor Kevin Warsh, National Economic Council director Kevin Hassett, Treasury Secretary Scott Bessent, former World Bank president David Malpass, and current Fed governor Christopher Waller.
Trump has reportedly spoken with Warsh multiple times about the role, and Warsh himself acknowledged recently that he “wouldn’t be shocked” by an early nomination. However, Warsh’s hawkish past and blunt demeanour have led some in Trump’s circle to question whether he’d toe the president’s line once in office.
Bessent, now Treasury Secretary, has emerged as a top favourite due to his loyalty and success in managing Trump’s volatile tariff policy rollouts. Though he has denied being in the running publicly, allies say he remains open to the idea. His Wall Street ties and rapport with Trump make him a strong candidate.
Waller, who has recently called for rate cuts as early as the Fed’s next meeting in July, is also being considered. Though Trump appointed him in 2020, the two are not personally close, making him more of a long shot.
Risks of a “shadow chair”
Announcing a Fed pick far in advance would be highly unusual. Chairs are typically named just three to four months before their term ends to avoid politicizing monetary policy. But Trump’s team sees potential benefits in shaping the rate narrative early, especially as economic pressures mount ahead of the 2026 midterms.
Still, such a move could backfire. A premature nominee may face public scrutiny, appear to undermine the Fed’s independence, or even alienate Trump if they’re seen as too moderate. Powell, meanwhile, could choose to remain on the Fed board until 2028 even after his chair term expires, potentially limiting Trump’s influence.
Politics vs policy
The central bank’s independence has long been guarded, especially since the 1970s, when inflation soared after President Nixon pressured the Fed to keep rates low before his re-election. Trump has repeatedly clashed with Powell since naming him chair in 2018, and insiders say he regrets the choice.
At a recent NATO press conference, Trump didn’t hide his displeasure: “He goes out pretty soon, fortunately, because I think he’s terrible.”
Still, Powell told Congress this week that he’s focused only on delivering a stable economy and controlling inflation, not on political manoeuvring. “All I want to do…is to have the economy be strong and have inflation be under control,” he said.
If Trump moves forward with an early nomination, it would mark a dramatic escalation in the politicization of the Fed—and signal how high the stakes have become in shaping the post-pandemic economy.
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