Trump Hints at Replacing Fed Chair Jerome Powell: “By the End of the Year”

  

In a move that has markets leaning forward, Donald Trump announced during a press encounter aboard Air Force One that a decision on the next Federal Reserve Chair may be made “by the end of the year.” This possible acceleration in replacing Jerome Powell, whose term as Chair runs until May 2026, has notably stirred both political and financial circles.

Treasury Secretary Scott Bessent confirmed that a shortlist of five finalists has been compiled, including current Fed governors Christopher Waller and Michelle Bowman, former Governor Kevin Warsh, White House economic adviser Kevin Hassett, and investment executive Rick Rieder. 

Why the Push for an Early Decision?

Trump has publicly voiced frustration with Powell’s pace in cutting interest rates and his perceived reluctance to align with the administration’s agenda. Sources say the President now sees selecting a successor as a strategic maneuver to influence monetary policy more directly. 

Market and Institutional Ripples

Financial markets are particularly sensitive to news regarding Fed leadership, and the revelation that a replacement could come sooner than expected has triggered speculation across bond, equity, and currency markets. Analysts warn that early nomination could raise questions about the Fed’s independence, a cornerstone of global financial stability.

The Candidates and Their Implications

The leading names each bring distinct policy leanings and implications for the future of U.S. monetary strategy:

• Kevin Hassett: Trump ally and former economic adviser; seen as aligning closely with presidential priorities. 

• Christopher Waller: A current Fed governor with experience in payments and regulatory work. 

• Michelle Bowman: Known for her community banking background and more moderate regulatory stance. 

• Kevin Warsh: Former Fed governor during the 2008 financial crisis; seen as a monetary hawk. 

• Rick Rieder: Veteran investment executive with deep ties to markets and fixed income. 

A decision by year-end would accelerate the transition process. However, analysts note that while the nomination might be announced soon, the actual start of a new chair’s term is still likely aligned with the end of Powell’s tenure in May 2026.

Independence Under the Spotlight

This announcement raises broader questions about the balance between political influence and central-bank autonomy. Market watchers argue that the Fed’s credibility depends on its capacity to act free from short-term pressures, which is now under renewed scrutiny.

 FAQs 

Q1: Did President Trump actually say he will pick a new Fed Chair by the end of the year?
Yes during a recent press briefing, he stated that the decision for the next Fed Chair could come “by the end of the year.”

Q2: Who are the finalists being considered to succeed Jerome Powell?
Treasury Secretary Scott Bessent confirmed the shortlist includes Christopher Waller, Michelle Bowman, Kevin Warsh, Kevin Hassett, and Rick Rieder.

Q3: Why is the decision being moved up?
Because President Trump has expressed dissatisfaction with the Fed’s pace on interest-rate cuts and other policy areas, and wants more influence over leadership and direction.

Q4: Does this mean Jerome Powell will leave immediately?
Not necessarily. While the nominee might be announced soon, his actual term as Fed Chair could still begin when Powell’s term ends in May 2026.

Q5: What are the market implications of this move?
The market may react strongly, particularly in interest rates, bonds, and currencies, as leadership changes at the Fed influence monetary policy expectations and credibility of central-bank independence.

Q6: Could this undermine the independence of the Federal Reserve?
Yes, critics argue an early politically driven nomination may raise concerns about the Fed’s autonomy and its ability to act independently of the administration.