Trump Could Name New Fed Chair by Christmas
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Trump Expected to Name New Fed Chair Before Christmas, Treasury Secretary says
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Treasury Secretary Scott Bessent indicated President Trump is likely to announce a replacement for Jerome Powell before the year’s end, signaling a potential shift in monetary policy.
The Announcement and Context
Treasury Secretary Scott Bessent stated on CNBC Tuesday that there is a “very good chance” President Donald Trump will name a replacement for federal Reserve Chair Jerome Powell before Christmas. CNBC Powell’s current four-year term as Fed chair is set to expire in May.
This announcement comes amidst a history of public disagreements between President Trump and Powell regarding monetary policy. Trump has repeatedly criticized Powell for raising interest rates, arguing they hindered economic growth. The President has openly expressed a desire for lower rates to stimulate the economy.
A History of Tension: Trump vs. Powell
The relationship between President Trump and Jerome Powell has been notably strained throughout Powell’s tenure. Trump frequently voiced his disapproval of the Fed’s interest rate hikes, often via Twitter, and even suggested the fed was “going loco.” These public rebukes are highly unusual for a President regarding the self-reliant Federal Reserve.
Here’s a timeline of key events highlighting the tension:
| Date | Event |
|---|---|
| February 2018 | Trump privately expresses dissatisfaction with Powell’s early actions as Fed Chair. |
| August 2018 | Trump publicly criticizes the Fed for raising interest rates. |
| December 2018 | Trump calls the Fed’s rate hike decision “sad.” |
| August 2019 | Trump demands the Fed cut rates by at least 100 basis points. |
| March 2020 | The fed cuts rates to near zero in response to the COVID-19 pandemic, temporarily easing tensions. |
This ongoing friction raises questions about the future independence of the Federal Reserve and the potential for political influence over monetary policy.
Potential Nominees and Their Policy Stances
While no official nominees have been announced, speculation is already swirling around potential candidates. Several names have been mentioned as possible replacements for Powell, each with distinct policy perspectives.
- John Williams (President, New York Fed): Considered a mainstream economist, Williams generally supports a cautious approach to monetary policy.
- Kevin warsh (Former Fed Governor): A more hawkish candidate, Warsh has advocated for tighter monetary policy and greater scrutiny of financial regulations.
- Judy Shelton (Conservative Economist): Shelton is a vocal advocate for a return to the gold