New reports claim that President Trump is strongly considering Treasury Secretary Scott Bessent to replace Jerome Powell as Chair of the Federal Reserve. Powell’s term will expire in May 2026.
Trump has repeatedly quarreled with his Fed Chair and may be aiming to replace him as quickly as possible. He could also try to forcibly oust Powell, but that could have messy implications for US fiscal policy.
Trump is Eager to Replace Powell
The Federal Reserve is a key component of US financial policy. Therefore, it’s naturally a key point of interest for President Trump.
Currently, Powell’s term as Fed Chair is set to expire in May 2026, and reports claim that Trump is already considering Treasury Secretary Scott Bessent as his replacement.
Although this is an unorthodox move, it makes a lot of sense, especially considering Trump’s recent displeasure with Powell.
Recently, the CFTC had multiple Commissioners significantly overstay their expiration dates, creating a quagmire in which it currently has only two of five Commissioners.
Similarly, SEC Chair Paul Atkins took months to receive a Senate confirmation, delaying official business. If Trump names Bessent now, he could be preparing to act fast in May 2026. Some arguments suggest he’s planning to act sooner.
In recent weeks, the President has repeatedly threatened to fire Powell, regardless of the term limit, over his interest rate policies.
However, the Fed Chair has vowed not to leave without a fight. He asserts that the President has no right to fire him and is willing to contest the point.
In May, the Supreme Court ruled that Trump could fire certain federal appointees, but that Powell is exempt. Specifically, it claimed that the Fed “is a uniquely structured, quasi-private entity” with special considerations.
In other words, a legal battle might get messy, potentially scaring foreign investors away from US markets.
By clearly signaling his support for Bessent this early, Trump may be establishing a way to replace Powell as soon as possible. Still, this is all based on rumor.
According to Bloomberg, other potential contenders include Kevin Hassett, the White House’s National Economic Council director, Christopher Waller, a Fed governor, and former World Bank President David Malpass.
Trump could pick any of them to replace Powell, but it might not be relevant until the Summer of 2026. Regardless, it seems clear that the President is not happy with the current Fed Chair.
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