Donald Trump’s admin took shape and got to work immediately. But there’s one problem he wants to solve.
That’s why President Trump has shared this huge announcement about replacing a key federal employee.
Trump Rules Out Bessent for Fed Chair, Signals Ongoing Tensions with Powell
President Donald Trump has confirmed that Treasury Secretary Scott Bessent will not be considered as a replacement for Federal Reserve Chair Jerome Powell. This decision comes amid ongoing friction between Trump and Powell, with the president repeatedly expressing dissatisfaction with the Federal Reserve’s monetary policies.
Despite pressure from Trump, Powell has reportedly told close confidants that he plans to complete his term, which extends until May 2026. During an appearance on “Squawk Box,” Trump clarified that Bessent, a key figure in his administration, prefers to remain in his current role at the Treasury Department.
“Well, I love Scott, but he wants to stay where he is,” Trump said. “I will — I’ll take him off the … because I asked him just last night, ‘Is this something you want?’ ‘Nope. I want to stay where I am.’ He actually said, ‘I want to work with you. It’s such an honor.’ I said, ‘That’s very nice. I appreciate that.’”
Trump emphasized Bessent’s commitment to his current position, stating, “But no, Scott wants to do what he’s doing. He’s doing a great job and he wants to do what he’s doing. So I just take him off. He does not want it. He likes being Treasury secretary. He’s doing a really good job.”
The president’s public criticism of Powell has centered on the Federal Reserve’s refusal to lower interest rates during his tenure. Trump has frequently called for Powell’s resignation, arguing that the Fed’s policies have hindered economic growth.
According to a report by Axios, some of Trump’s allies have suggested appointing a “shadow Fed chair” to prepare for Powell’s eventual departure, signaling a strategic move to influence monetary policy before the end of Powell’s term.
On “Finnerty” last Friday, Trump acknowledged potential market risks in removing Powell prematurely. “They say it would disturb the market,” Trump said. “I would remove him in a heartbeat, but they say it would disturb the market. He gets out in seven or eight months, and I’ll put somebody else in.”
Tensions Between Trump and Powell Hotter Than Ever
The relationship between President Donald Trump and Federal Reserve Chair Jerome Powell has been marked by persistent conflict, primarily over monetary policy. Trump has long advocated for lower interest rates to stimulate economic growth, viewing the Fed’s higher rates as a barrier to his economic agenda. Powell, however, has maintained the Federal Reserve’s independence, prioritizing long-term economic stability over short-term political pressures.
Since taking office, Trump has openly criticized Powell’s leadership, particularly the Fed’s decisions to maintain or raise interest rates during periods of economic expansion. In 2018, Trump famously remarked that Powell was a “mistake” as Fed chair, accusing him of undermining economic growth by keeping rates too high. This sentiment has persisted into Trump’s current term, with the president repeatedly urging Powell to cut rates to boost markets and consumer spending.
Powell, appointed by Trump in 2018, has defended the Fed’s actions, emphasizing the need to control inflation and prevent economic overheating. In public statements, Powell has stressed that the Federal Reserve operates independently of political influence, a stance that has frustrated Trump and his allies. This independence is enshrined in the Federal Reserve Act, which grants the Fed autonomy to set monetary policy without direct interference from the executive branch.
Market analysts have warned that any attempt to remove Powell before his term ends could trigger significant volatility. The Federal Reserve’s credibility relies on its perceived independence, and abrupt changes in leadership could erode investor confidence. Trump’s acknowledgment of these risks on “Finnerty” suggests a pragmatic approach, though his frustration with Powell remains evident.
Inflation has moderated since its peak in 2022, but the Fed’s cautious approach to rate cuts has drawn criticism from Trump, who argues that lower rates would accelerate growth. Conversely, Powell has pointed to the risks of cutting rates too quickly, which could reignite inflation and destabilize the economy.
