Jerome Powell and Donald Trump have not-so-good agreements with each other, and the US president often criticizes the other for the delay in the interest rate cut. With the implementation of the import tariff, Trump has asked the Federal Reserve for some serious rate cuts, especially as the EU has implemented 10 cuts. Still, the Fed denied and wishes to monitor the tariff impact before making these decisions. Now, the dispute has resulted in the threat of Trump firing Powell. So, who will lead the Fed next? Let’s discuss.
Top Candidates to Replace Jerome Powell if He Leaves
Although Donald Trump, as the US president, has the utmost control and power, firing Jerome Powell may not be one of them. Recently, the Supreme Court revealed that the relationship between the President and the Fed is different from that of other independent agencies. As a result, Powell is potentially safe from Trump’s removal attempts.
However, this does not change Trump’s issues with Powell, as he called his rate decision too late before the Capitol Hill testaments. After the unchanged interest rates, Powell again signals no immediate rate cut.
Now the eyes are on the Fed Chair’s term end, which is in May 2026. Notably, Trump has begun interviewing candidates. According to the White House Economic Policy Reporter, Brian Schwartz, both individuals have started choosing the next Fed Chair.
Jerome Powell’s consideration includes Kevin Warsh (former Fed Governor), Kevin Hassett (ex-National Economic Council Director, Christopher Waller (current Fed Governor), and David Malpass (former World Bank President).
Notably, Schwartz points out that they are loyal but have their own challenges. On the other hand, Scott Bessent (Treasury Secretary nominee) is the top candidate for Trump.
Who Will Lead the Federal Reserve Next?
The next Federal Reserve chairman is still under consideration, and no official announcement has been made. However, the Polymarket data hint at who could be next based on investors’ betting.
According to that, the top five candidates are Kevin Warsh with 23% odds, Chris Waller (21%), Kevin Hasset (17%), Scott Bessent (11%), and Judy Selton (10%).
Although the term would end in May 2026, there’s a certain possibility that it may come earlier. However, there are also bets on the possibility that there won’t be any announcement this year, with a probability is 16%.
