Trump is in a hurry, considering announcing a "shadow Fed chair" this summer
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Trump is in a hurry, considering announcing a "shadow Fed chair" this summer
Trump is considering announcing his pick for the next Fed chair as early as this summer, far sooner than the traditional 3-4 month transition period.
Navigating Web3 tides with focused insightsBy Long Yue, TechFlow
With the Federal Reserve迟迟 not cutting interest rates, Trump is growing impatient. He’s once again considering breaking norms by announcing his pick for the next Fed chair well in advance, attempting to use a "shadow chair" strategy to pressure current Chair Jerome Powell into accelerating rate cuts.
According to the Wall Street Journal, Trump is weighing the possibility of naming Powell’s successor as early as this summer or fall—far sooner than the traditional 3-4 month transition period. Sources say Trump has grown increasingly frustrated with the Fed’s cautious stance on rate cuts and hopes that an early announcement will allow the designated successor to begin shaping market expectations and influencing monetary policy even before Powell’s term ends.
Insiders revealed that in recent weeks, Trump has been considering selecting and announcing Powell’s replacement by September or October. His anger toward Powell could prompt him to make the announcement even earlier this summer—though the new Fed chair would not officially take office until May next year.
Trump hinted at an accelerated timeline during a press conference at the NATO summit:
I know who I’m going to choose among three or four people. Fortunately, he’ll be leaving soon, because I think he’s terrible.
However, Fed policy is set by a committee of 12 decision-makers, and Trump cannot appoint a majority unless current governors resign early. This means any new chair must be able to persuade a broader committee. Announcing a successor prematurely also carries risks: the nominee may be placed in the awkward position of publicly criticizing future colleagues, or lose credibility by appearing overly loyal to Trump, seen by markets as a “yes-man.”
Candidates Emerge
As previously reported by TechFlow, media outlets have identified several leading candidates: former Fed governor Kevin Warsh, former National Economic Council Director Kevin Hassett, current Fed Governor Christopher Waller, and Treasury Secretary Scott Bessent.
Waller, whom Trump nominated during his first term, said in a CNBC interview last Friday that he might support a rate cut next month due to concerns about excessive weakness in the labor market.
In the past two months, Warsh—one of the frontrunners for the next Fed chair—has delivered multiple speeches criticizing the central bank. “I see the media getting worked up about politicians attacking the Fed,” he said. “I just want to say: Grow up. Stand firm.”
Powell Responds
Facing political pressure, Powell reaffirmed the Fed’s independence during a Senate hearing on Wednesday: “If we make mistakes here, people will pay the price for a long time.” He said rate cuts this year are possible but emphasized the Fed will “take a cautious approach.”
Powell’s term as Fed chair expires in May next year, though his term as a Fed governor runs until 2028—meaning he could remain on the board for another 1.5 years after stepping down as chair. During a congressional hearing on Tuesday, Powell said he is focused solely on “keeping the economy strong and inflation under control during my remaining time at the Fed.”
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