Trump considers breaking historical precedent by announcing the next Federal Reserve chairman candidate early
U.S. President Trump recently publicly criticized current Federal Reserve Chairman Jerome Powell as "terrible" and revealed he has identified three to four potential candidates to succeed Powell as the next Federal Reserve chairman.
Trump is considering announcing the next Federal Reserve chairman candidate as early as September this year, which would be about eight months earlier than the current chairman Powell's term ending in May 2026, breaking historical transition customs.
This move aims to influence market expectations for future interest rate paths through an established "shadow Federal Reserve chairman" and to exert pressure on current chairman Powell, who insists on independent decision-making.
Candidates emerge
The main candidates currently considered by the White House include:
Former Federal Reserve Governor Kevin Warsh;
Chairman of the Council of Economic Advisers Kevin Hassett;
Current Federal Reserve Governor Christopher Waller, although reports in January 2025 indicated that Waller had been removed from the main candidate list due to his support for a significant interest rate cut last September;
Treasury Secretary Scott Bessent.
Breaking historical transition customs
If Trump announces his nominee in September or earlier, it will create a new model for power transition at the Federal Reserve. The traditional transition period is usually 3-4 months before the term ends, while this plan would advance the transition preparation period to 8-10 months, with the nominee remaining in a "chairman-in-waiting" status for a long time before Powell officially steps down.
This arrangement allows the nominee to influence market expectations through public speeches, creating a "shadow pressure" on the current decision-making body. However, it also places the successor in a dilemma—criticizing current policies could damage internal unity at the Federal Reserve, while remaining silent could risk losing Trump's support.
Trump has repeatedly criticized Powell for not lowering interest rates and has suggested firing him or quickly appointing a successor. Although he sometimes retracts his threats, the overall public pressure on the Federal Reserve has become routine.
Historically, Federal Reserve chairmen are considered not to be removed by the U.S. president unless there is malfeasance or misconduct, but Trump's frequent threats are seen as a deliberate challenge to this legal premise.
