The countdown for a leadership change has begun! Trump stated on Air Force One today: the next Federal Reserve chairman candidate will be announced soon, and his ideal candidate must lower interest rates. He specifically criticized the current chairman Powell as a "disaster," nicknamed "Mr. Too Late," demanding an immediate one percentage point rate cut, with the straightforward reasoning: "Europe has cut ten times, and the U.S. hasn’t cut even once."
Powell's term was originally set to last until May 2026, and the White House planned to interview successors this fall, but Trump has suddenly accelerated the change. Former Federal Reserve governor Kevin Walsh is the top contender, and Trump praised him today for receiving "very high ratings." Walsh joined the Federal Reserve at 35, his father-in-law is the heir to Estée Lauder, and he even encouraged Trump to buy Greenland.
This tactic of "appointing a new leader in advance" was actually suggested by Secretary of the Treasury Mnuchin last year: nominate a successor as a "shadow chairman," making Powell immediately a mere figurehead. Powell firmly stated last year that he would never leave early, but Trump used this tactic to undermine him, which is harsher than a direct firing. The market is now most afraid of the Federal Reserve's independence collapsing, with future interest rates depending entirely on Trump’s whims. The countdown for the leadership change has already been fast-forwarded.