US President Donald Trump has announced that he has begun work to determine the successor to US Federal Reserve (FED) Chair Jerome Powell, whose term ends in 2026. While Trump’s move is being closely monitored in markets and political circles, it appears that the long-standing criticisms against Powell have now turned into a concrete change process.
While answering questions from reporters at the NATO Summit held recently, Trump said the following about the FED Chair: “Change may be imminent. I have narrowed down who I will choose to three or four people.” This statement indicates that although Powell’s term officially ends in 2026, Trump plans to announce the change earlier.
“He is not lowering interest rates fast enough”
Trump’s criticisms of Powell are based on interest rate policy. The US President argues that current interest rates are high and are slowing down economic growth. Powell, on the other hand, adopts a more cautious and data-driven approach in interest rate decisions. Powell, who particularly emphasizes that the new tariffs Trump wants to implement could trigger inflation, does not look favorably on rapid interest rate cuts.
This disagreement strengthens Trump’s desire to bring a more compatible name to the head of the FED in the new term. According to sources close to Trump, former FED governor Kevin Warsh, former White House economic advisor Kevin Hassett, current FED member Christopher Waller and former World Bank President David Malpass are among the candidates. In addition, billionaire investor Scott Bessent’s name is frequently mentioned behind the scenes.
There are legal obstacles
However, Trump faces certain obstacles to making this change. According to a previous decision by the US Supreme Court, the FED Chair cannot be removed from office due to political pressure. The institution’s independence is constitutionally guaranteed. Trump is also aware of this fact. In a previous NBC interview, he stated that he did not plan to dismiss Powell before her term ends: “Why would I do that? I will have the right to replace her very soon anyway,” he said. However, Trump’s latest statements on the subject show that he is turning to a strategy of creating pressure on the markets by announcing his decision early and declaring Powell “undesirable.” This situation both brings the discussions about the independence of the FED back to the agenda and reveals that Trump is preparing to follow a more aggressive path in economic policies before the upcoming elections. While Trump’s official candidate announcement is expected in the coming weeks, the impact of this move on the markets and Powell’s attitude will be closely monitored. While the search for direction in cryptocurrencies and the traditional economy continues, the FED chairmanship has become one of the hottest agendas of 2025.
