The Wall Street Journal reported that U.S. President Donald Trump is considering announcing a successor to Jerome Powell, the Federal Reserve chair, earlier than expected; this would disrupt Powell's authority.
If Trump announces a successor to Powell now, market focus will shift to the statements and views of the person who will succeed Powell; as the current Federal Reserve chair will appear to be in a temporary role and will not be able to move the markets in the same way.
Trump's anger towards Powell - who has faced the president's repeated criticism on social media with calls for an immediate interest rate cut - could lead to an earlier announcement, possibly during the summer.
The Wall Street Journal reported that Trump is considering former Federal Reserve governor Kevin Warsh and National Economic Council director Kevin Hassett. Other candidates include Treasury Secretary Scott Pruitt, former World Bank president David Malpass, and Federal Reserve governor Christopher Waller.
Powell has largely ignored calls for an immediate interest rate cut, indicating that he will complete the remainder of his term, which ends in May 2026.
Trump's announcement of Powell's successor could come much earlier than the traditional transition period of three to four months, and he may aim to undermine Powell's influence in the markets.
Trump hinted on Wednesday at his willingness to choose a replacement for Powell soon, criticizing the Federal Reserve chair whom Trump appointed during his first term.
Powell largely reiterated his cautious stance during his testimony before Congress this week. The Federal Reserve chairman has repeatedly warned that the trade tariffs imposed by Trump have raised doubts about the economic outlook and pose inflationary risks, preventing the bank from taking further action on interest rates.