The Trump administration, as confirmed by Treasury Secretary Scott Bessent, has commenced the formal process to find a successor to Federal Reserve Chairman Jerome Powell. This significant development was disclosed during Bessent's appearance on a Bloomberg Surveillance interview on Tuesday, where he mentioned the existence of multiple qualified candidates and the anticipated pace of the selection process.
The treasury secretary's comments represent the first official acknowledgment from the administration about the concrete measures being taken to remove Powell from his position. The move comes amidst a series of escalating criticisms by President Trump against Chairman Powell, accusing him of mismanaging monetary policy and responding inadequately to economic challenges.
President Trump's dissatisfaction with Powell's performance has been vividly expressed through public statements, branding him with derogatory terms such as "stupid," "too late," and "a numbskull." The president's contentious relationship with the Fed Chairman peaked last week when he publicly demanded Powell's immediate resignation – a direct call unprecedented in their ongoing conflict.
The administration's pressure on Powell intensified with Trump's recent hint at assuming direct control of the Federal Reserve. "Maybe I should go to the Fed... Am I allowed to appoint myself at the Fed? I’d do a much better job than these people," Trump mused, sparking further debates over the independence of the central bank.
In addition to the president's personal attacks, a $2.5 billion renovation project at the Federal Reserve headquarters has become a focal point of criticism. Trump condemned the project's expense, likening Powell to a "knucklehead" and "stupid guy" for overseeing such costs. Office Management and Budget Director Russell Vought echoed these sentiments in a CNBC interview, decrying the project as excessively lavish and indicative of "fundamental mismanagement" at the Fed.
The administration's concerted criticism extends across multiple officials, with National Economic Council Director Kevin Hassett, a potential candidate for Powell's position, suggesting that the president has the legal authority to dismiss the Fed chairman if justified. This is further corroborated by coordinated statements from Fed candidate Kevin Warsh and Vice President J.D. Vance, as reported by Zerohedge.
Trump's persistent call for a one percent rate cut has been a cornerstone of his economic strategy. Many of his supporters view Powell's potential firing as a strategic move to facilitate lower interest rates and provide economic relief to consumers. Nevertheless, some market observers express concerns over the repercussions of such an abrupt leadership change, which could trigger uncertainty and volatility in financial markets.
