Trump Considers Candidates to Replace Fed Chair Jay Powell

A source close to the White House revealed that the list of potential candidates to replace Federal Reserve Chair Jay Powell includes long shots such as David Zervos, Jefferies chief market strategist, and former Fed governor Larry Lindsey. National Economic Council chair Kevin Hassett, former Fed governor Kevin Warsh, and Fed governor Christopher Waller are considered the frontrunners for the position. The selection process is reportedly influenced by Trump's desire to cut interest rates from 4.25-4.5% to 1%, a goal that Powell has resisted due to concerns about the impact of Trump's trade war on inflation.

Key Takeaways:

David Zervos, Jefferies chief market strategist, is a long shot for the Fed chair position.
Larry Lindsey, former Fed governor and National Economic Council chair, is a candidate for the position.
Kevin Hassett, National Economic Council chair, and Kevin Warsh, former Fed governor, are considered the frontrunners to succeed Jay Powell.
Fed governor Christopher Waller is also in the running for the position.
Trump has criticized Powell throughout his second term, labeling him a "numbskull" and a "moron" over interest rate refusal.
Powell's term is set to end in May 2026.
The president wants to cut interest rates from 4.25-4.5% to 1%, a goal opposed by Powell.
Powell has cited the trade war as a reason to halt a rate-cutting cycle that began in 2024.
A grim jobs report and a cool inflation reading for July have raised the prospect of a 0.25 percentage point cut in September.
Administration officials, including Bessent, are pushing for a half-point move.

Statistics:

Interest rates: 4.25-4.5%
Desired interest rate: 1%
Powell's term end date: May 2026
Rate-cutting cycle start date: 2024
Potential cut size in September: 0.25 percentage point
Potential cut size in September (administrative preference): half-point

Sources:

A source close to the White House (no date mentioned)
CNBC (no date mentioned)