Reports suggest Trump may replace Fed chair Jerome Powell with Scott Bessent

President Donald Trump and Federal Reserve chair Jerome Powell have been at war for years.

Powell’s term runs until May 2026, so Trump can either replace him and fight it out in court, which would likely take until the Fed chair’s term was over anyway, or sit patiently for another year and suffer with Powell calling the shots.

Either way, it looks like Trump could be replacing Powell with Treasury Secretary Scott Bessent, who is already on record saying that he would do whatever the president wanted.

Replacing Powell

The topic of removing Powell has been on the table since the 2024 campaign.

Even though Trump chose Powell for the chairman position during his first term, these two have had some epic battles over the Fed’s failure to lower interest rates.

Trump even went after Powell when Joe Biden was in office, which is perhaps why Biden extended the Fed chair’s service when his initial term expired in 2022.

Unfortunately for Trump, Powell will still be on the board for several more years, regardless of when he leaves as chair.

When Trump was asked about Bessent replacing Powell, he responded, “He’s an option, and he’s very good. Well, he’s not, because I like the job he’s doing, right?”

Now, if I am Trump here, I just suffer through Powell for the next year, then bring my guy in so as not to set the table for Democrats to replace my pick if they happen to win the 2028 presidential election.

The downside of that is that tariffs are starting to hit, and Powell may decide to raise interest rates in response, which would be a nightmare for Trump.

Trump has already stated that Powell has cost the country hundreds of millions by not lowering rates, so if he raises them again, it would be an absolute disaster for the president.

And that does not even take into account how the media and Democrats would react.

The problem for Powell is that he wants to wait and see how the tariffs will impact the overall economy, and that data is just now starting to emerge.

Powell and Trump are about as far apart as it gets regarding tariffs, as the president believes they will bring about only a short-lived one-time bump in pricing until trade deals with foreign leaders are signed.

Powell and some economists believe the tariffs could send the United States into a recession, possibly driving up inflation.

In the most recent reports, inflation ticked up just a notch, so I am going to go out on a limb and say Powell is going to hold off just a bit longer, and if he does anything, based on the most recent data, it would be to leave the rates where they are or to raise them again.

Let’s hope I am wrong.