Trump Set to Name New Federal Reserve Chair
President Trump announced that he has made a decision regarding the next Federal Reserve chairman, hinting that a replacement for Jerome Powell will be named soon. For months, Trump has voiced dissatisfaction with Powell, particularly criticizing his reluctance to cut interest rates sooner.
While speaking to reporters on Air Force One Sunday, Trump refrained from providing a specific nomination but mentioned that the announcement would be made shortly, adding that he does not plan to remove Powell before his term concludes in May.
“I know who I’m going to choose,” Trump stated as he returned to Washington. As the discussion about the front-runner, Kevin Hassett, heated up, the pressure on the White House to steer the central bank’s direction increased.
Speaking to reporters, Trump expressed excitement about making an announcement. When asked if Hassett was the chosen one, he smiled, saying, “I haven’t told you. I’ll announce that.”
Hassett, who serves as Trump’s chief economic adviser, played down rumors suggesting he was the front-runner, labeling them as “mere speculation.” He viewed Trump’s comments as a positive sign for the market, noting that when it became clear a decision was near, the markets rallied, interest rates decreased, and historical bond auction records were set.
“I think the market is anticipating a new Fed chair and is eager for President Trump to select someone different,” he added, indicating that he would be pleased to serve if chosen.
Trump has frequently criticized Powell for not implementing rate cuts rapidly enough, claiming, “I want to fire my ass.” Despite heightened tensions between the White House and the Fed, Trump has repeatedly stated his intention not to dismiss Powell prematurely.
Treasury Secretary Scott Bessent, responsible for the selection process, confirmed that interviews have been conducted with all five candidates, which include Hassett, Kevin Warsh, Chris Waller, Michelle Bowman, and Rick Reeder.
Administration officials have pointed out that Trump trusts Hassett, the former Chairman of the Council of Economic Advisers, who is currently a member of the National Economic Council’s Board of Directors. Following rumors of Hassett being the favored candidate, market reactions indicated optimism, with the yield on the 10-year Treasury dipping notably.
The upcoming decision is significant as the Fed grapples with internal divisions on whether rate cuts are warranted for December. Inflation has eased but still surpasses target levels, unemployment has risen to 4.4%, and a government shutdown has hindered access to essential economic data, leaving policymakers in a challenging position.
Powell has adopted a cautious approach, which has reportedly frustrated Trump, who believes the Fed’s policies are impeding growth while voters deal with increasing prices and borrowing costs.
In this second term, Trump has taken a more aggressive stance toward the Fed, openly critiquing Powell more than 40 times since April. He has labeled Powell as “stupid” and “ignorant,” comparing him unfavorably to a golfer struggling with putting.
