Trump Initiates Process to Replace Powell as Fed Chair

US President Donald Trump has been vocal about his dissatisfaction with Federal Reserve Chair Jerome Powell, repeatedly urging him to cut interest rates and even calling for his resignation. Powell, however, has maintained that interest rate cuts should be delayed, citing concerns about the potential harm to the US economy. This ongoing tension has led Trump to explore potential replacements for Powell.

In a significant development, US Treasury Secretary Scott Bessent announced that the official process to identify a successor for Powell has commenced. Speaking to a financial news program, Bessent stated that the process will unfold at Trump's discretion, with many strong candidates under consideration. The Treasury Secretary also highlighted the potential market impact of uncertainty surrounding Powell's tenure, warning that Powell's continued influence beyond his term as chair could create confusion in the markets.

Powell's term as chair is set to expire in 2026, but his board membership extends until January 2028. This means that even after stepping down as chair, Powell could still wield significant influence over the Fed's decision-making processes. However, Powell has thus far declined to comment on the possibility of remaining on the board after his chairmanship ends.

Bessent's remarks underscore the growing tension between the White House and the Federal Reserve, with Trump's public calls for rate cuts and Powell's resistance to such demands. The Treasury Secretary's comments also highlight the potential market implications of this ongoing dispute, as uncertainty surrounding the Fed's leadership could lead to increased volatility and confusion.