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06/26/2025

Trump Goes Big: Considering Announcing a Fed "Shadow Chair" as Early as This Summer to Pressure Powell

In a move that's surprising yet consistent with former President Donald Trump's aggressive style, he is reportedly weighing an early announcement of a successor to Federal Reserve Chair Jerome Powell — even though Powell's current term doesn't end until May 2026. The information was revealed by the Wall Street Journal, citing sources close to Trump's campaign. According to them, he wants to announce the identity of the next Fed Chair as early as this summer or fall, rather than

Trump Goes Big: Considering Announcing a Fed "Shadow Chair" as Early as This Summer to Pressure Powell

In a move that's surprising yet consistent with former President Donald Trump's aggressive style, he is reportedly weighing an early announcement of a successor to Federal Reserve Chair Jerome Powell — even though Powell's current term doesn't end until May 2026.

The information was revealed by the Wall Street Journal, citing sources close to Trump's campaign. According to them, he wants to announce the identity of the next Fed Chair as early as this summer or fall, rather than waiting until the typical transition window (usually 3–4 months out).

Objective: Apply Pressure and Shape Market Expectations

The motivation behind this unconventional plan is fairly clear: Trump is frustrated with the Fed's cautious stance under Powell's leadership, particularly as persistently high interest rates continue to weigh on the U.S. economy. By naming a successor early — dubbed by the media as a "shadow chair" — Trump hopes this person can indirectly shape financial market expectations and create political pressure to force the Fed into cutting rates sooner.

At a recent press conference on the sidelines of the NATO summit, Trump hinted cryptically:

"I already know who I'll pick from 3 or 4 people… luckily he's (Powell) leaving soon, because I don't think he's done a good job."

Who's on the Shortlist?

The public is closely watching the names emerging on Trump's shortlist. Four notable candidates include:

  • Kevin Warsh: Former Fed Board of Governors member, previously considered by Trump in 2017.
  • Christopher Waller: Current Fed governor, appointed by Trump during his first term.
  • Larry Kudlow & Kevin Hassett: Two former White House economic advisors.
  • Paul Bessent: An investor close to Trump who has recently emerged as an insider favorite.

Expert Warnings

Announcing a successor this early could create significant communications and market risks, as the nominee would be forced to either stay silent or field sensitive questions from the press — all while holding no actual authority.

Furthermore, under the Fed's current structure, a new chair cannot unilaterally set monetary policy — decisions require the input of all 12 members of the Federal Open Market Committee (FOMC). Unless a wave of governors resigns, Trump would have little chance of securing a majority on the FOMC.

Powell: "The Fed Is Independent — We Won't Waver"

Facing mounting pressure, Jerome Powell recently stood firm:

"If we make mistakes, the American people will pay the price for a long time."

That said, Powell did not rule out rate cuts in 2025, but emphasized the Fed will act "carefully" based on economic data.

Commentary: Is Fed Independence Under Threat?

If Trump wins reelection and executes his plan to announce a "shadow chair," it would mark the first time in modern American history that a sitting Fed chair has been effectively sidelined through a media-driven successor announcement before their term ends.

Whether or not the plan is actually carried out, this move clearly reflects Trump's dissatisfaction with current monetary policy — and opens up a significant geopolitical and financial power play heading into the next term.