Trump to Announce New Federal Reserve Chair Nominee
Announcement Scheduled for Friday Morning
Former President Donald Trump has announced he will reveal his nominee for the Federal Reserve chair on Friday morning. Speaking to reporters, Trump described his selection as an “outstanding person” who is “very respected” and “known to everybody in the financial world.”
Potential Candidates Under Consideration
While the president has not confirmed the nominee, indications suggest that two front-runners are White House National Economic Council Director Kevin Hassett and former Fed board member Kevin Warsh. Earlier this month, Trump remarked, “the two Kevins are very good,” while hinting that other candidates could also be in the running.
Conditions for the New Nominee
Trump’s selection is underpinned by a desire for a Fed chair who supports more aggressive interest rate cuts. The current chair, Jerome Powell, has faced criticism from Trump for his methodical approach to mstarttary policy over the past year. Lower interest rates are viewed by Trump as essential for boosting economic growth and reducing borrowing costs; however, such actions also carry the risk of reigniting inflation.
In recent months, Trump has publicly criticized Powell, referring to him as a “stubborn mule” and “Mr. Too Late.” He has even suggested the possibility of firing Powell, whom he appointed during his first term. Powell’s term as chair is set to end in May, although he may remain a member of the Fed’s Board of Governors until early 2028.
Legal Challenges and Their Implications
The situation surrounding Powell has intensified due to recent subpoenas issued by the Juststart Department as part of a criminal investigation linked to his testimony regarding a costly renovation project for the Fed’s headquarters in Washington D.C. Powell has characterized the subpoenas as an attempt to intimidate the Fed and undermine its independence, stating, “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.”
The White House has asserted that Trump did not direct the Juststart Department to issue the subpoenas, with U.S. Attorney for D.C. Jeanine Pirro clarifying that they were merely inquiries due to the Fed’s lack of response.
Senate Confirmation Challenges
The ongoing investigation could complicate the Senate confirmation process for Trump’s new Fed chair nominee. Key Senate Republicans, including Senator Thom Tillis of North Carolina, have indicated they will oppose any new nominees until the legal issues surrounding Powell are resolved.
If confirmed, the new nominee would enhance Trump’s influence over the central bank, which plays a crucial role in global economic policy. Currently, of the seven-member Fed board, only three were appointed by Trump. However, nominal control is tempered by the fact that interest rates are ultimately set by a committee that includes representatives from regional banks.
Future Composition of the Fed Board
There is also the potential for Powell to remain on the Fed board after his chairmanship concludes. In this scenario, Trump’s nominee would likely need to replace board member Stephen Miran, a White House adviser, who was appointed to a temporary position last year, leaving Trump with only three out of seven board seats. The next opening on the board will occur when Powell’s term ends in January 2028.
Furthermore, Trump’s administration is currently engaged in a legal battle over the ability to dismiss Biden-nominated board member Lisa Cook, which could open another seat. Trump’s attempt to remove Cook was challenged in court as she contended that fired Fed board members can only be removed “for cause.”
As the Supreme Court prepares to rule on the matter, their decision could have significant implications for the composition and direction of the Federal Reserve in the coming years.