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President Trump is turning up the volume on signals that he plans to name a replacement for Federal Reserve Chairman Jerome Powell, more than 10 months before Powell leaves office.
“We have a stupid person, frankly, at the Fed. He’s done a poor job,” the president said in a recent appearance.
“You ever see that old cartoon where the hook comes out and it’s just about ready to yank someone off stage?” asked financial planner Richard Rosso. “This is the president’s hook.”
Powell has repeatedly drawn the president’s ire for opting against cutting interest rates to boost the economy, because Powell says he’s concerned new tariffs could cause inflation.
While Powell’s term as Fed Chairman doesn’t run out until May 2026, Rosso says naming a successor could signal to the business community and the markets that the next chairman will be less hawkish on inflation and more inclined to give a rate cut.
“I know, within three or four people, who I’m going to pick,” Trump said.
Speculation for who those people are now centers around:
·Former Fed governor Kevin Warsh
·National Economic Council director Kevin Hassett
·Treasury Secretary Scott Bessent
·World Bank President David Malpass
·Fed governor Christopher Waller.
Rosso favors Hasset, but says any of them would helpfully signal a new direction so investors can plan accordingly. “There’s nothing he can do about Powell,” Rosso said. “But what he can do is create the White House narrative about what the Fed should have done.”
By the time Powell is scheduled to leave, the country will be well into the 2026 election year but Rosso believes Trump having a Fed Chairman “in-waiting” could be politically helpful if the economy starts to soften. “The economy is slowing,” he said. “And if the economy does worsen, and the Fed is late in taking action, that would be great, politically, to say ‘listen, if they would have done what I said, we wouldn’t be in this situation.”