 "Trump renews threat to use Jerome Powell for 'incompetence', to name new Fed chief in January")
US President Donald Trump on Monday reiterated his threat to file a lawsuit against Federal Reserve Chair Jerome Powell, accusing him of “gross incompetence” over the handling of renovation works at the Fed’s headquarters in Washington.
Speaking to reporters in Florida, Trump also said he intends to announce his choice for the next Federal Reserve chair sometime in January.
“I do, still do — hasn’t changed,” Trump said at a press conference Monday, when asked if he has a favorite candidate. “I’ll announce him at the right time. There’s plenty of time.”
“Powell should resign” he added and said that he’d “love to fire him.”
The president had come close to pursuing Jerome Powell’s removal in July but stepped back following a negative response from financial markets. “Maybe I still might,” Trump said when asked about the possibility, speaking to reporters at his Mar-a-Lago resort in Florida. He did not identify a leading candidate to succeed Powell, saying only that an announcement would be made in “January sometime”.
Who can be the new Fed Chair?
National Economic Council Director Kevin Hassett is widely viewed as the frontrunner, although Trump has also shown interest in former Federal Reserve governor Kevin Warsh. Other names said to be in contention include current Fed governors Christopher Waller and Michelle Bowman, as well as BlackRock executive Rick Rieder.
Trump has offered a series of opaque and at times conflicting comments about how he is approaching the selection of the next central bank chief. Earlier in December, he said the field had been narrowed to a single contender before later indicating that several candidates were still under consideration and publicly praising multiple individuals on the shortlist.
A long-time critic of Powell, whom he appointed during his first term, Trump has made clear he wants the next chair to pursue more aggressive interest rate cuts as the White House seeks to reduce mortgage costs. The Federal Reserve has cut rates at each of its past three meetings, though officials signalled in December that only one rate cut is likely in 2026.
Quick Reads
View AllOn Monday, Trump said he was weighing a “gross incompetence” lawsuit against Powell over an ongoing renovation project at the Fed. Powell’s term as chair is due to end in May 2026, while his term as a member of the Board of Governors runs until 2028. Powell has not indicated whether he plans to step down when his chairmanship concludes, a move that would prevent Trump from appointing a new member to the Fed’s board.
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