President Trump made it clear on Friday that he will not appoint a new Federal Reserve chair unless that individual supports cutting interest rates. This announcement sends a strong signal to global financial markets that future U.S. monetary policy could be directly shaped by presidential influence rather than the traditionally independent Federal Reserve.
Trump has been increasingly vocal in his dissatisfaction with current Fed chair Jerome Powell, criticizing the central bank for not cutting rates during his time in office. Although the Fed has signaled potential rate cuts later this year, Trump believes the pace and scope of those cuts are insufficient, prompting him to push for more immediate and aggressive action.
Trump Vows to Replace Fed Chair With Rate-Cutting Ally, Challenging Central Bank IndependenceTrump Signals Intent to Replace Fed Chair, Prioritizing Rate Cuts Over Independence
In comments to reporters, Trump stated outright that he would only appoint someone who is committed to lowering interest rates. This confirms speculation that the White House intends to steer the Fed in a more politically aligned direction, potentially undermining the institution’s independence. Trump’s remarks come amid continued pressure on Powell, whose term doesn’t end until May 2026.
Adding to the drama, administration officials have suggested that a new Fed chair could be nominated as early as October. Treasury Secretary Scott Bessent, who is rumored to be a potential successor to Powell, told CNBC he would “do what the president wants,” further hinting at the possibility of a politically motivated shake-up at the central bank.
