US President Donald Trump criticised Federal Reserve Chair Jerome Powell on Friday, stating bluntly that he would be happy if Powell resigned. Trump has long demanded steep interest rate cuts and appears ready to nominate a replacement who aligns with that view. “I’d love him to resign if he wanted to. He’s done a lousy job,” Trump said, while also calling Powell “stupid.”
Trump said he may announce a successor to Powell “very soon,” despite the Fed chair’s term not ending until May 2026. Such an early move would be unprecedented and could create a de facto “shadow chair,” undercutting Powell’s authority and casting uncertainty over US monetary policy. Experts warn that this could harm the Fed’s independence and credibility.
What Trump said about the prospective new Fed chief?
On Friday, Trump made clear that any future Fed chair nominee must support significant rate cuts. “If I think somebody’s going to keep the rates where they are… I’m not going to put them in. I’m going to put somebody that wants to cut rates. There are a lot of them out there,” he said.
Trump has said he’s considering three or four candidates, with names like Scott Bessent, Kevin Hassett, Kevin Warsh, and current Fed Governor Christopher Waller being floated. Waller, who was appointed by Trump in his previous term, recently signaled openness to cutting rates in the Fed’s upcoming July meeting.
Although Powell’s chair term ends in May 2026, his board term lasts until 2028. The first seat available for appointment is Governor Adriana Kugler’s, expiring in early 2026, meaning Trump’s pick may be named in October or November to take the reins in 2026.
Trump has been especially frustrated that the Fed has not lowered rates since he returned to office in January. He has demanded rates be cut to 1%, far below the current range of 4.25%–4.50%.
Market reaction to Trump’s announcement
News of Trump’s possible early Fed nomination rattled currency markets. The US dollar index fell 0.3% Thursday, reaching its lowest point since February 2022. However, stock markets rose sharply, with investors appearing less concerned about the potential policy shift.
Meanwhile, critics warn Trump’s pressure risks politicising the Fed, which is structured to operate independently.