Trump may move early on naming the next Fed chair, potentially aligning the announcement with this week’s policy decision.
Summary:
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Trump may announce Fed chair nominee as soon as this week
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Timing could coincide with the January FOMC decision
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Powell’s term runs until May, but Trump appears keen to move early
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Analysts see political incentive if the Fed holds rates
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Markets alert to implications for Fed independence
Donald Trump could announce his nominee to replace Jerome Powell as early as this week, potentially timing the decision to coincide with the Federal Reserve’s January policy meeting, according to analysts.
The Federal Open Market Committee is due to deliver its interest-rate decision on Wednesday, an event that already carries heightened sensitivity amid renewed scrutiny of central-bank independence. Analysts suggest that announcing a Fed chair pick alongside the meeting would allow the White House to shape the policy narrative, particularly if the Fed opts to hold rates steady.
Trump has repeatedly criticised the Fed’s policy stance and has made clear his intention to replace Powell, even though the current chair’s term does not expire until May. Treasury Secretary Scott Bessent has indicated that the president’s decision on a successor could come as soon as this week, reinforcing expectations that the process is being brought forward.
Market commentators argue that aligning the announcement with the January meeting would serve a strategic purpose. If the Fed refrains from cutting rates, a nomination could redirect attention toward future leadership and policy direction, rather than the immediate decision. More broadly, analysts see a wide window for an announcement spanning the current meeting or the weeks immediately ahead.
The personnel backdrop adds another layer of complexity. The term of Federal Reserve Governor Stephen Miran is due to expire this weekend, although he can remain in his role until a successor is confirmed. It remains unclear whether the White House intends to nominate a replacement governor at the same time as unveiling its preferred candidate for chair, or whether the two decisions will be handled separately.
While the White House has declined to comment on timing or sequencing, markets are increasingly alert to the political dimension surrounding the Fed. Any move to accelerate the chair nomination process is likely to intensify debate around policy independence and could inject additional volatility into rates, currencies and equities at a sensitive moment for monetary policy.
