Former President Donald Trump is increasing the pressure on Powell, the Federal Reserve Chair, to resign immediately. Trump’s comments come as the Fed has come under increased scrutiny for its interest rate policy and internal program expenditures, eliciting more political heat. Trump’s attack on Powell as he convened his Cabinet meeting showed that he wants a Federal Reserve that suits his economic views.
While Powell has continued to argue needs to be caution about cutting rates, Trump sees this position as a hurdle to accelerating the economy. The comments reflect general plans to remake the Federal Reserve, which lines up with the 2026 cycle, and with Powell’s term ending next May, former president Trump is seemingly to lay a plan with candidates even now for the top position.
Trump Says Powell Must “Resign Immediately”
In response to a reporter’s question about ongoing Republican concerns regarding Federal Reserve renovation costs, Trump repeated his demand that Fed Chair Powell step down. This echoes a similar message he posted the previous week on Truth Social. Trump said it’s acceptable if Congress launches an investigation into Powell’s statements, emphasizing again that he finds the chair “terrible.”
This feud has intensified in recent weeks. Trump insists Powell misled lawmakers about renovation costs and claims Powell manipulated interest rates in the lead-up to the 2024 election. Trump accused him of “cutting rates like crazy” to support Democratic candidates.
Interest Rate Policy Remains the Flashpoint
Trump’s demand isn’t just about the renovations. At the core of the dispute lies the Federal Reserve’s current interest rate policy. Powell has advised patience, warning that Trump’s proposed tariffs may increase inflation. As a result, he prefers to wait before introducing rate cuts.
Trump, on the other hand, wants someone in the Fed who will support faster rate cuts to stimulate the economy. This growing divergence in policy direction highlights why Trump is eager for change.
Bessent Emerges as a Leading Candidate
Treasury Secretary Scott Bessent has quickly become a top contender to succeed Powell. During the Cabinet meeting, Trump even joked with Bessent, saying, “I like you better,” suggesting strong support for his potential promotion.
Bessent himself confirmed in interviews that the administration is weighing two options: either appointing a new Fed board member in January who could be promoted to chair in May, or directly naming a new chair when Powell’s term ends. He also hinted that both chair and board seats could open next year, allowing Trump to reshape Fed leadership more comprehensively.
Who Else Is in the Running?
Besides Bessent, Trump’s shortlist includes former Fed governor Kevin Warsh, NEC director Kevin Hassett, ex-World Bank head David Malpass, and current Fed governor Christopher Waller. Trump has said he’s narrowed the choice to “two or three top” names, but final selection could depend on how events unfold in early 2025.
Another board member, Adriana Kugler, is expected to leave on January 31. That departure opens up another 14-year seat, and the administration may use that opportunity to install someone who could soon take the chair’s post.
Powell’s Future Remains Unclear
While his chair term ends in May, Fed Chair Powell still has a board governor term running through 2028. He has not confirmed if he’ll stay on the board after stepping down as chair. But growing political pressure and public criticism could influence his decision.
With Trump’s strategy now public, the battle over monetary policy direction is clearly underway. The next Federal Reserve chair will play a critical role in determining how fast interest rates fall, whether inflation stays in check, and how the U.S. economy navigates a politically charged 2026.
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