Trump plans to remove Powell before his term ends,
Donald Trump is preparing to take out Jerome Powell before his term ends in May 2026, and the blowback could hit every corner of the US economy.
Word on Washington is that Trump told aides he’ll name a new Federal Reserve chair “very soon,” despite Powell still having close to a year left. The names being considered include Scott Bessent, Kevin Warsh, Kevin Hassett, Christopher Waller, and even David Malpass.
Every single one of them has either worked in or around Republican economic circles, and most are seen as likely to support lower rates—something Trump has been aggressively demanding.
If Trump fires Powell, it would likely turn into a brutal legal showdown. Powell has strong support from both Democrats and Republicans in Congress. He’s also said multiple times that he wouldn’t step aside just because of political pressure.
The standoff could lead to months of court battles, freezing the Fed’s ability to act and damaging investor trust. It also risks turning the most revered central bank on the planet into a joke.
Trump’s move adds pressure to markets already on edge
Wall Street is already reacting. Torsten Slok, chief economist at Apollo Management, said the drama over the Fed chair is part of why 10-year Treasury yields have been creeping up.
Investors are bracing for instability, especially if Powell is dumped early and Trump pushes in someone who favors aggressive rate cuts. Slok explained that this kind of uncertainty “gets priced in,” and the markets are already doing that.
The idea of a “Shadow Fed” is now being seriously discussed. Scott Bessent reportedly supported the concept before joining Trump’s team.
That means if Trump names a replacement early—before Powell is out—the nominee could start making unofficial statements and influencing policy before even being confirmed. Investors would be stuck listening to two competing voices: the actual Fed chair and the political pick waiting to take over.
