Trump May Replace Fed Chair Jerome Powell: Kevin Warsh and Waller Top List

President Donald Trump continues to express growing frustration with Federal Reserve Chair Jerome Powell’s performance, with discussions intensifying inside the administration about who could potentially replace him before his term ends in May 2026.

Kevin Warsh, a former Fed governor and longtime critic of the central bank’s current direction, is widely seen as the front-runner. Warsh, who played a key role during the 2008 financial crisis as a liaison between the Fed and Wall Street, has openly argued that the Fed has become too political and inefficient in tackling inflation. He has also downplayed the inflationary risks of tariffs, instead suggesting that deregulation and fiscal restraint could ease long-term inflation.

According to sources, Trump and Warsh held discussions earlier this year. Although Warsh advised the president to wait until Powell’s term expires, Trump is reportedly still weighing an earlier replacement due to ongoing dissatisfaction, particularly with Powell’s response to inflation during Biden’s presidency and his more recent resistance to immediate rate cuts.

Steve Moore, a longtime Trump economic adviser, said the likelihood of Powell being removed is “less than 50-50,” but emphasized the president’s authority to make leadership changes if necessary. Moore also took issue with Powell’s latest remarks that the Fed would “wait for greater clarity” on economic signals, especially regarding inflation and tariffs—criticizing the comments as politically charged.

Other possible contenders include current National Economic Council Director Kevin Hassett, Reagan-era economist Art Laffer, and Larry Kudlow, who served as NEC director during Trump’s first term. All three are known for supporting pro-growth monetary policies and would likely advocate for quicker interest rate cuts.

Treasury Secretary Scott Bessent has urged the administration to maintain institutional stability. He confirmed that interviews for a potential Powell successor will begin in the fall and emphasized the importance of keeping the Fed's monetary tools insulated from short-term political pressures.

Another name gaining attention is Fed Governor Christopher Waller, appointed by Trump in his first term. Waller recently stated that interest rate cuts could be necessary to fend off a potential recession and suggested that any inflation caused by tariffs could be temporary. He acknowledged the controversy surrounding such a stance, referencing the Fed’s miscalculations during the pandemic-era inflation spike, but stood by his view that the long-term economic picture should guide policy.

Analysts warn that an abrupt leadership change at the Fed could lead to uncertainty in financial markets. Investors typically favor predictability at the central bank, and sudden changes could affect bond yields, investor confidence, and even the U.S. dollar’s position in global markets.

Legally, replacing Powell before the end of his term could spark a court battle. Federal Reserve Board members are appointed to 14-year terms and can only be removed “for cause,” a legal standard that lacks a clear definition. While the statute allows for removal, it remains ambiguous whether dissatisfaction with policy decisions qualifies as sufficient cause.

Some experts believe the Trump administration may test these boundaries. TD Cowen analyst Jaret Seiberg pointed to the removal of two Democrats from the National Credit Union Administration as a sign the White House may assert more direct control over financial regulatory institutions.

Trump, who appointed Powell in 2018, did not mince words in a recent Oval Office meeting. “If I want him out, he’ll be out of there real fast,” he told reporters.

With interest rates, tariffs, and recession concerns dominating the economic landscape, all eyes remain on how Trump will handle the central bank’s leadership—and whether Powell’s days at the helm are truly numbered.

Also Read: Trump Says Fed Chair Powell Should Be Fired, Demands Immediate Rate Cuts