Trump's Strong Signal: Powell's Fed Era Won't End
President Donald Trump is once again pressuring Federal Reserve Chairman Jerome Powell, this time with a more personal tone. From Davos, Switzerland, Trump signaled that Powell would not be "comfortable" if he remained on the Fed's Board of Governors after his term as chairman ended.
In an interview with CNBC aired Wednesday (January 21), Trump diplomatically responded, "We'll see." But when asked about the possibility of Powell remaining as governor until 2028, Trump countered with a sharp warning: if that happened, "his life wouldn't be very happy."
Pressure on Powell has also reportedly increased since the Trump administration issued a subpoena leading to a potential investigation into the Fed's Washington headquarters renovation project. Powell vehemently denied the move, calling it a form of "political pressure," and this situation has fueled speculation that he could choose to stay on at the Fed even though the chairmanship changes in May.
If Powell does remain as governor, his influence on monetary policy could still be significant—as the governor position still carries a significant say in interest rate decisions at the world's most influential central bank.
Meanwhile, Trump said the search for Powell's replacement had entered its final phase. He claimed the initially larger list of candidates was rapidly narrowing: from four, to three, to two—and “maybe one name already in mind.”
Some names mentioned on the shortlist include Rick Rieder (BlackRock), Kevin Hassett (National Economic Council Director), Christopher Waller (Fed Governor), and former governor Kevin Warsh, with the process being led by Treasury Secretary Scott Bessent. Trump also indicated he preferred Hassett to remain in his current position because he was considered crucial as the administration's economic “spokesperson.”
But the drama wasn't over. The subpoena to the Fed had the potential to further complicate the Senate confirmation process. Republican Senator Thom Tillis even threatened to withhold support for any Fed nominee until the dispute was resolved. Trump responded calmly—even quipping that Tillis “won't be a senator much longer” because he won't be running for reelection this year.
Source: Newsmaker.id
