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President Donald Trump announced Thursday that he will reveal his choice for Federal Reserve chair on Friday morning, setting the stage for what could become a pivotal moment for U.S. monetary policy and the central bank’s independence.
“I’ll be announcing the Fed chair tomorrow morning,” Trump told reporters as he attended a screening of the documentary “Melania” about his wife. “It’s going to be somebody that is very respected, somebody that’s known to everybody in the financial world. And I think it’s going to be a very good choice.”
The highly anticipated decision comes after a year of escalating tensions between Trump and current Fed Chair Jerome Powell, whose term expires in May. Throughout his presidency, Trump has publicly criticized Powell for not cutting interest rates more aggressively, arguing that lower rates would stimulate faster economic growth.
Powell has maintained a measured approach to monetary policy, particularly as inflation has remained elevated amid Trump’s tariff policies. The central banker has prioritized data-driven decision-making over political considerations, a stance that has drawn the president’s ire.
Treasury Secretary Scott Bessent has led the search for Powell’s replacement. Four finalists have emerged: Kevin Warsh, a former Fed governor; Christopher Waller, a current Fed governor; Rick Rieder, an executive at BlackRock; and Kevin Hassett, director of the White House National Economic Council.
Trump hinted Thursday that his selection might be “somebody that could have been there a few years ago,” fueling speculation about Warsh, who was a finalist during the 2017 search that ultimately resulted in Powell’s appointment.
The relationship between Trump and the Federal Reserve deteriorated further when the president used renovation costs at the Fed’s headquarters as another point of attack against Powell. This campaign resulted in Justice Department subpoenas to the central bank earlier this month.
In an unusual move, Powell responded with a video statement defending the Fed’s independence: “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.”
Financial markets are watching the appointment closely, as the next Fed chair will wield significant influence over interest rates that affect everything from mortgage costs to business loans. Wall Street analysts have expressed concern about any nominee who might prioritize political directives over economic data when setting monetary policy.
Powell has a potential countermove that could preserve the Fed’s independence. While his term as chair concludes in May, his position on the Fed’s Board of Governors extends until 2028. By remaining on the board, Powell could potentially block Trump’s ability to establish majority control through his nominees.
The seven-member Board of Governors currently includes three members appointed by former President Joe Biden, in addition to Powell, whom Biden renominated for a second term as chair. This composition creates a procedural challenge for Trump, who would either need to select an existing board member as chair or replace Stephen Miran, who is temporarily filling a board seat while on leave from his position as chair of the White House Council of Economic Advisers.
When asked at a Wednesday news conference if he would leave the board entirely, Powell declined to answer directly. However, he offered advice to any successor about maintaining the Fed’s independence while remaining accountable to the public.
“Don’t get pulled into elected politics — don’t do it,” Powell warned. “Another is, that our window into democratic accountability is Congress. And it’s not a passive burden for us to go to Congress and talk to people. It’s an affirmative regular obligation.”
The upcoming announcement represents more than just a personnel change. It signals how the administration might approach monetary policy at a time when inflation concerns, economic growth, and market stability remain top priorities for voters and investors alike.
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9 Comments
The Federal Reserve’s independence is crucial for maintaining stable and effective monetary policy. I hope Trump’s nominee will respect the Fed’s role and avoid political interference.
I agree, the Fed’s independence is essential. Hopefully the nominee will be someone with strong economic credentials and a track record of making decisions based on data rather than politics.
As an investor, I’ll be watching this announcement closely. The Fed chair’s approach to issues like inflation, unemployment, and financial stability can have a big impact on my portfolio.
The selection of the next Fed chair is an important decision that will shape the course of U.S. economic policy in the years ahead. I hope the nominee will put the health of the economy above partisan politics.
Given Trump’s past criticism of Powell, I’m curious to see if he will nominate someone with a more dovish approach to monetary policy. This could have major implications for the future direction of interest rates.
With inflation remaining elevated, the next Fed chair will face challenging decisions on interest rates and other monetary policy tools. I hope the nominee will take a balanced, data-driven approach.
This announcement will be closely watched by financial markets. The choice of Fed chair can have significant implications for interest rates, inflation, and the broader economy.
Absolutely, the Fed chair’s influence on monetary policy is critical. Investors will be analyzing the nominee’s background and policy views very carefully.
Interesting to see who Trump will nominate as the next Fed chair. Given his past criticisms of Powell, it will be important to see if he picks someone more aligned with his views on monetary policy.