“I think the President will choose the person that he likes, and it’s not going to be Jay Powell,” Hassett said at a White House event.
While Trump has previously floated the possibility of removing Powell, he recently stated, “I’m not going to fire him,” walking back earlier threats.
Still, some analysts interpret Trump’s remarks as an effort to influence monetary policy in advance, with one describing it as the creation of a “shadow” Fed chair ahead of the term’s end in May 2026.
Despite Trump’s barrage of insults and threats, replacing the Fed chair is no simple task. Federal Reserve leaders have historically been protected from political dismissal unless misconduct is proven. Legal precedent, including a Supreme Court ruling, restricts presidents from firing Fed chairs over policy disagreements.
Still, the president’s comments have rattled markets. The US dollar weakened following his remarks, with the US Dollar Index (DXY) falling to a three-and-a-half-year low of 97.60 in early European trading Thursday. Concerns around Fed independence and political interference have also added downward pressure on the greenback.