U.S. President Donald Trump mentioned the possibility of appointing a successor to Jerome Powell, chair of the U.S. Federal Reserve (Fed). While Trump has pressed for a cut in the benchmark interest rate, there are analyses suggesting that he may resort to extreme measures as Powell stands firm, claiming to make independent decisions based on real economic indicators.
On the 7th, according to Reuters, President Trump met with reporters aboard Air Force One and said, "A decision regarding the appointment of the Fed chair will be announced soon."
Trump also noted that Kevin Warsh, a former Federal Reserve board member mentioned as a candidate to succeed Powell, is "a highly regarded individual."
Powell's term runs until May 2026. However, there is a scenario being continuously raised on Wall Street that Trump could induce Powell's lame-duck status by putting forward a so-called "shadow chair" before the end of his term.
Earlier, The Wall Street Journal (WSJ) reported that President Trump considered prematurely dismissing Powell in April but abandoned the idea due to objections from Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick. Advisors warned that dismissing the Fed chair could undermine the credibility of the U.S. economy and lead to an uncontrollable financial crisis.
Despite pressure from President Trump, there are prevailing forecasts that the Federal Open Market Committee (FOMC) meeting on the 17th and 18th will keep the benchmark interest rate unchanged. This is because there are no signs of an economic downturn warranting a rate cut, as U.S. nonfarm payrolls in May exceeded market expectations.
According to the Chicago Mercantile Exchange (CME) FedWatch tool, participants in the U.S. federal funds rate (FF) futures market are reflecting a 97.4% probability that the benchmark interest rate will remain unchanged at the upcoming June FOMC meeting.