Trump Plans to End Powell's Term: New Fed Chairs on the Table

Trump names 3-4 candidates to replace Fed President Powell

U.S. President Trump said he was in the process of deciding on three or four nominees to replace Federal Reserve Chairman Jerome Powell near the end of his term, and hardened his criticism of Powell.

This statement from Trump came in particular with the demand for interest rate cuts. Powell's tendency to proceed with his “wait and see” strategy fueled rising tension between the White House and the central bank. Trump argues that the strategy is slowing economic growth and negatively affecting financial markets. His remarks, which included personal insults such as “a very stupid person” against Powell, raised serious public questions about the Fed's independence.

This exit of the US President is not only an individual dissatisfaction, but also directly related to the administration's inflation targets and economic expansion strategies. Trump has advocated a pullback in interest rates to the 1-2 percent range, while Powell and some board members have yet to signal a clear direction based on the data. This divergence has made it more difficult for investors to price Fed policies, and the fact that some members, such as Chris Waller and Michelle Bowman, have also given interest rate cut signals, has magnified the debate.

Among the candidates being talked about in Washington for post-Powell are former Fed governor Kevin Warsh, current governor Chris Waller and Treasury Secretary Scott Bessent. Each of these names represents different trends in monetary policy. Warsh, for example, has previously advocated swift action in crisis response, while Waller has taken a data-driven and cautious approach. Bessent is seen as the closest name to Trump's economic agenda. This diversity leads to uncertainty for the future direction of the central bank and becomes a strategic issue that markets should monitor carefully.

One of the most critical elements for investors is the extent to which the independence of the central bank will be maintained in the post-Powell era. If new appointees are subject to political pressure, this could directly affect valuations. Especially high-interest sensitive assets, such as technology and growth stocks, could make a premium in an aggressive interest rate cut scenario. On the other hand, while market players want to translate these developments into opportunities, an environment of uncertainty can increase short-term volatility and trigger a shift towards safe havens. It looks like the currency markets will be the first to feel this pressure, especially over the dollar index.

Although Powell's statement that “I will complete my term” gives a temporary sense of stability, Trump's direct personal criticisms and signals of impeachment will continue to call into question the Fed's authority throughout his presidency. This marks a period of caution in setting strategies for individual investors. While the cautious approach becomes important both in terms of position size and sector selection, institutional investors can increase diversification in their portfolios by taking regulatory risk into account.

🧠 Expert Review

In the short term, the post-Powell debate raises the prospect of a rate cut in the markets, while the perception of uncertainty may raise the risk premium. In the medium term, Trump's choice of candidate will shape the Fed's orientation and could lead to sectoral divergences. In the long run, the degree to which the central bank will resist political pressure could affect investor confidence and global respect for the American financial system. Therefore, investors should closely monitor both the news feed and monetary policy signals.

🛑 Disclaimer

This content is created by the Investment Desk and does not constitute investment advice. You should make your decisions based on your own research and expert advisors.

stock market, usa stock news, stock news, breaking news, interest rate cut, federal reserve, central bank, monetary policy, investor concern, trump effect, candidates to replace Powell