President Donald Trump has made it clear he wants to replace Federal Reserve Chair Jerome Powell, whose term expires in May 2026, and is preparing to announce his nominee early in the new year. Trump has publicly criticized Powell for not cutting interest rates more aggressively and has pushed for someone more aligned with his preference for lower rates.
Trump's early-2026 timeline for naming a successor reflects his desire to reshape the central bank's leadership and policy direction as soon as Powell's term ends, potentially setting the stage for a nominee to be confirmed in time for the Fed's June policy meeting.
Several candidates are under active consideration, with Trump's top economic adviser Kevin Hassett widely viewed as the frontrunner in prediction markets, followed by former Fed governor Kevin Warsh and current Fed governor Christopher Waller.
Treasury Secretary Scott Bessent has been conducting interviews and guiding the selection process, and Trump has signaled he is close to a final decision.
Trump has emphasized the importance of appointing someone who supports lower interest rates than Powell permitted, underscoring a key priority for his administration's economic agenda. However, the choice of chair will still require Senate confirmation, and markets and policymakers are watching closely given concerns about maintaining the Federal Reserve's institutional independence.
The shift in leadership comes amid ongoing debate over the pace and magnitude of rate cuts, with economists split on how aggressively the Fed should ease monetary policy next year. Trump's pick for Fed chair is expected to face immediate pressure to balance his preferences with broader economic conditions and the views of other policymakers at the central bank.
