Trump Plans to Create a 'Shadow Federal Reserve Chairman'

On June 26, according to the Wall Street Journal, Trump is increasingly dissatisfied with the Federal Reserve's inaction on interest rate cuts, prompting him to consider announcing the next Federal Reserve Chairman candidate ahead of schedule. Currently, the term of the incumbent Chairman Powell has 11 months remaining. According to informed sources, in recent weeks, Trump has been contemplating whether to select and announce Powell's successor this September or October. Trump's dissatisfaction with Powell may even prompt him to make this decision earlier this summer. Potential candidates Trump is considering include former Federal Reserve Governor Kevin Warsh and National Economic Council Director Hassett. Additionally, Treasury Secretary Mnuchin has also been recommended as a potential candidate by the supporters of both individuals. Other possible nominees include former World Bank President Malpass and current Federal Reserve Governor Waller. Since the new Federal Reserve Chairman will not officially take office until next May, announcing a candidate this summer or fall would be several months earlier than the usual three to four month transition period. This early announcement strategy could allow the nominee to influence market expectations regarding future interest rate paths in advance.