Poor Jerome Powell, the Federal Reserve Chairman! He has to overcome a long-running feud with the US president, withstand nasty remarks from Trump’s administration, and steer monetary policy amid Trump’s protectionist policy. Yet, the central bank chief forges ahead with high interest rates. The question is how much longer he can endure.
The likelihood that Fed Chair Jerome Powell will remain in office after his term expires in May 2026 is fading by the day. Recent comments from President Donald Trump and Treasury Secretary Scott Bessent suggest that a nominee could be unveiled well before Powell’s official term ends.
According to experts, this is a risky development. It creates a scenario in which a so-called “shadow Fed Chair” could effectively begin to take over even while Jerome Powell is still in office.
As reported by Bloomberg, Scott Bessent recently stated that the White House is open to appointing the next Federal Reserve chair as early as January 2026.
"There’s a 14-year seat opening up in January," Bessent emphasized. "So we’ve been thinking that maybe this person would become Chair when Jay Powell steps down in May."
Alternatively, the new chairman could simply be appointed in May, which would not interfere with Powell’s current duties, Bessent noted. However, for a potential Vice Chair or successor, this would mean a shorter two-year term.
According to Bessent, current Federal Reserve members are also being considered for the top job: "Obviously, there are people among the candidates who are already working at the Federal Reserve," he said. "If you add another one in January, the institution’s work continues as normal, and markets wouldn’t be confused."
Some analysts and market participants believe that Powell’s influence is already weakening. His once-unshakable authority has begun to erode with help from the White House.
"President Trump has succeeded in turning Fed Chair Jerome Powell into a lame duck," Louis Navellier at Navellier & Associates said. He also pointed to increased chatter from FOMC members, hinting at a possible rate cut by the end of July.
