Jerome Powell’s current term as Chair of the Federal Reserve expires in May 2026. As that date nears, predictions that he will be removed from office are heating up. Donald Trump, the former President and perhaps the most influential player in Republican politics today, has ruled Powell out of consideration—loudly and repeatedly. This decision clears a path for some significant and long overdue discussions about a leadership change at the Fed.
In recent weeks during meetings with GOP lawmakers, Trump has shared his dissatisfaction with Powell’s performance. He even mused publicly about the prospect of firing Powell before his term expires in toto. If adopted, this move would represent a sea change in monetary policy. It coincides almost perfectly with the Trump administration’s preferred picture of the economy as he seeks deep cuts to reduce his financing costs on the nation’s huge $36 trillion debt.
One likely candidate to replace Powell is Kevin Warsh, a former member of the Federal Reserve Board. He is right to echo Trump’s call at the debate last night for an immediate change in leadership at the top. Warsh’s views suggest he may embrace policies that differ significantly from Powell’s approach. He has asserted that “the credibility deficit lies with the incumbents that are at the Fed, in my view,” indicating his belief that current leadership has faltered in meeting the Fed’s twin goals of low unemployment and stable prices.
Warsh’s comments reflect a broader frustration with the Fed’s hesitant stance on interest rate cuts. He stated, “Their hesitancy to cut rates, I think, is actually quite a mark against them.” This specific critique plays right into Trump’s hands, as he has called for further aggressive monetary policy shifts in the opposite direction to jumpstart economic growth.
Speculation about Jerome Powell’s future is already intensifying. Yet here is Trump, openly calling for a “regime change in the conduct of policy” at the Federal Reserve. This feeling was deepened during a recent House GOP conference meeting in which Trump dangled future agency heads’ removals in front of key Republican leadership. A senior official from the Trump administration has said as much while confirming such discussions, emphasizing just how dire this possibility really is.
Given this growing pressure, Trump recently claimed there were no plans to fire Powell anytime soon. This contradiction does little to quell speculation about the Chair’s position, especially considering Trump’s history of expressing frustration with Powell. In fact, Powell has already angered Trump on three major counts. This frustration found its most concentrated expression when the Fed refused to make the violent rate cuts that Trump desired.
By Warsh’s own admission in these frank remarks, he would be an antithesis to Powell. He would be out of step with other holdover members of the Federal Reserve should he rise to leadership. His assertion that “I think regime change at the Fed will happen in due course” signals his confidence in a shifting landscape within the central bank.
As discussions continue among Republican lawmakers and influential figures in finance, Warsh remains a key player in any potential transition at the Fed. He lays out a vision for monetary policy that dovetails nicely with Trump’s wishes. Specifically, the former Treasury secretary is arguing for a much more aggressive approach to monetary policy and fiscal policy.