Trump Considers a Move to Undermine Fed Chief

President Trump is considering an early announcement of his pick to succeed Fed Chair Jerome Powell in a bid to undermine the man he calls "a very stupid person" for not cutting interest rates. Powell's term doesn't end until May. A replacement is usually announced three to four months in advance, but Trump is considering announcing Powell's replacement by September or October, or even sooner, the Wall Street Journal reports, noting this "could allow the chair-in-waiting to influence investor expectations about the likely path for rates." Trump continued bashing Powell as "low IQ" and "very stupid" on Wednesday, per CNN, noting he was down to "three or four" potential successors.

He's said to be considering former Fed governor Kevin Warsh, Fed governor Christopher Waller, National Economic Council director Kevin Hassett, Treasury Secretary Scott Bessent, and former World Bank President David Malpass. Fed governor Michelle Bowman's name has also been mentioned. Trump's focus is on how they view a rate cut and how persuasive they will be in convincing the Fed's rate-setting committee to adopt an easier interest-rate policy, the Journal reports. Trump asserted Wednesday that the government would save $900 billion year in interest payments if the rate were three points lower, per USA Today.

Trump reportedly spoke with Walsh, whom he previously considered for Treasury secretary, about replacing Powell months ago. "I wouldn't be shocked if the president made a nomination sooner than would be customary, just to … try to make a lame duck lamer or something like that," Walsh said at a private event this month. But some say an early announcement will put the incoming chair in a difficult spot of "publicly criticizing his or her future Fed colleagues—whose support will be needed if he or she wins Senate confirmation—and being judged by market participants as a sycophant," per the Journal. Powell, who's backed a "careful approach" of waiting to see if Trump's tariffs boost inflation, could remain on the Fed's board until 2028.