Trump plans to replace Jerome Powell at the head of the Fed

In a recent shattering outing, Donald Trump did not mince his words about Jerome Powell. The American president said: “His resignation cannot arrive too early”and that he would send him back without hesitation if he wanted to.

The confrontation between Trump and Powell intensifies

Donald Trump said last Thursday at a meeting in the oval office that Jerome Powell “Would leave very quickly” If he decided. This assertion comes despite the theoretical independence of the Fed and the doubts of experts on the legal capacity of the president to dismiss his president for simple political disagreement.

This threat is part of a long series of criticisms formulated by Trump towards Powell, which he accuses of having let inflation increase suddenly during and after the pandemic. The president wishes to regain control of the American monetary policy to align his economic objectives with those of the Central Bank.

Scott Bessent, the new secretary to the treasury, tempered these statements by saying that “ Monetary policy is a setting to preserve “, While confirming that the administration would begin to interview candidates to succeed Powell next fall.

This announcement suggests that even if Powell is not immediately dismissed, Trump is already preparing his replacement before the end of his mandate in 2026.

The financial markets observe this situation with concern, because a break with the traditional independence of the Fed could cause significant instability. American monetary policy influences the global economy, and any sudden change could have international repercussions.

Kevin Warsh, portrait of the potential successor

Kevin Warsh, 55, former vice-president at Morgan Stanley and Governor of the Fed from 2006 to 2011, is considered the favorite to succeed Powell. His experience during the great recession, where he served as a main intermediary with Wall Street, gives him significant credibility in the financial world.

In a tribune Published in the Wall Street Journal, Warsh criticized the Fed for letting inflation climb abruptly during the pandemic. He attributes this increase to ” a government that spent too much and a central bank that printed too much “, Alternating his vision with that of Trump.

Currently a researcher at the Institution Hoover and the University of Stanford, Warsh recently advised Trump's transition team on economic policy. His proximity to the president and his critical vision of the current management of the Fed make him the ideal candidate for Trump who seeks to redirect American monetary policy.

If this transition to the head of the Fed materializes, it will mark a major turning point in American monetary policy and could redefine the balance of powers between the White House and the traditionally independent monetary institution.

Meanwhile, Trump intensifies his pressure against Powell and requires a quick response from the Fed in the face of inflation. Could the departure of the President of the Central Bank occur earlier than expected?