President Trump is inching closer to picking a replacement for Federal Reserve Chair Jerome Powell, who has angered Trump for months with his refusal to slash interest rates despite cooling inflation.
According to the Wall Street Journal, Trump may name Powell's successor earlier than usual, weakening his influence over monetary policy for the remainder of his tenure.
Powell's term ends next May, but Trump could announce his replacement as early as this summer. That would create a much longer overlap than the usual three-to-four-month transition period, the Journal noted.
Some of the replacements Trump is considering are Fed Gov. Kevin Warsh and National Economic Council Director Kevin Hassett, the Journal reported, citing people familiar with the matter.
Treasury Secretary Scott Bessent, who has won praise as Trump's tariff messenger, is also being pitched for the role.
Trump is eager to bring the interest rate down to stimulate the economy. A lower rate would make it cheaper to borrow across the economy, and for consumers, it would mean spending less to take out a mortgage or finance a car.
"The administration is now laying the groundwork — including with the one, big, beautiful bill — to turbocharge economic, job, and investment growth, and it’s high time for monetary policy to complement this agenda and support America’s economic resurgence," White House spokesman Kush Desai told the Journal.
Trump's critics accuse him of trying to undermine the independence of the central bank, but Trump and others see Powell's monetary policy as politically motivated. Critics point out that the Fed slashed interest rates before the 2024 election, when Democrats controlled the White House, but the central bank is reluctant to do the same now.
Ahead of Powell's testimony to Congress on Tuesday, Trump urged lawmakers to pressure Powell to change course, calling him a "very dumb, hardheaded person." Trump has given Powell the nickname "Too Late," mocking his cautious approach as a policy setter.
That criticism has been echoed by Trump's loyal vice president J.D. Vance, who accused Powell of "monetary malpractice" by not cutting rates when inflation is low.
Prices barely ticked up in May, with annual inflation holding steady at 2.4%, blowing away predictions of a tariff-induced inflation disaster.
The Fed aims for an inflation target of about 2%, but Powell is taking a wait-and-see approach as the economic impact of Trump's tariffs plays out.
Powell predicts the tariff inflation will begin to appear in June's report, but he admitted inflation could come in lower than anticipated.
“We do expect tariff inflation to show up more,” Powell told the House Financial Services Committee Tuesday. "We really don’t know how much of that’s going to be passed through the consumer. We have to wait and see.”
