Trump Gets Closer to Naming His Pick to Replace Powell as Fed Chair

Economic

Summary:

President Trump is nearing a decision on who will replace Jerome Powell as Federal Reserve Chair, with several names under consideration and an announcement expected as early as this summer.

President Trump is getting closer to naming his replacement for Federal Reserve Chair Jerome Powell as his patience with the central bank chairman runs out.

Trump told reporters Wednesday that he is down to three or four candidates. He could announce his pick soon, two people close to the administration told Yahoo Finance.

The possibilities, these people said, include former Fed governor Kevin Warsh, National Economic Council director Kevin Hassett, Treasury Secretary Scott Bessent, former World Bank president David Malpass, and Fed governor Christopher Waller.

The Wall Street Journal reported late Wednesday that he could announce his final pick by September or October — or even this summer — to undercut Powell’s authority for the remainder of his term ending in May 2026. The Journal also reported on the list of possible candidates.

"I know within three or four people who I’m going to pick," the president said Wednesday without offering specific names.

Steve Moore, a longtime adviser to the president, told Yahoo Finance that Trump does want to announce his pick sometime soon, and that he does view it as a shot over the bow at Powell. Warsh, Hassett, Bessent and Malpass are all under consideration, he added, but Waller is not because he voted to keep rates on hold at the last central bank meeting.

Another person close to the administration said late September is possible timing for an announcement, and that Bessent, Hassett, Waller and Malpass are under consideration but that the president is souring on Warsh.

A White House official said no Fed chairman decisions are imminent, although the president has the right to change his mind and he has many good options for the post.

This is not the first time that an early pick to replace Powell has been floated. Before Trump was elected, Bessent in 2024 floated the idea of naming a "shadow chair" well before Powell's term was up, ensuring that "no one is really going to care what Jerome Powell has to say anymore."

Bessent told lawmakers earlier this month he would like to remain in his seat until 2029, but he did not dismiss the possibility of becoming the next chair of the Fed.

Bessent said he has "the best job" in Washington and is "happy to do what President Trump wants me to do," while noting that he "would like to stay in my seat through 2029" to help carry out the administration’s agenda.

Council of Economic Advisers chair Stephen Miran in a Yahoo Finance interview Thursday dismissed the chances of any economic fallout that could come from such a potential move by Trump to announce a "shadow" chair.

"I don't know that I see risks to the economy from what the administration does on this stuff, as you know the Federal Reserve sets interest rates and so the primary risks to the economy are from what's actually going on with interest rates not from anything that we do or do not do on that front," he told Yahoo Finance.

The active consideration of Powell successors comes after a period of intensifying pressure from Trump as the Fed chair’s guarded wait-and-see monetary policy stance continues to inflame tensions with the White House. The president has called repeatedly for rate cuts and lobbed a series of insults at Powell via social media, from "loser" to "fool."

Trump’s comments on Wednesday didn’t address the question of whether he is looking to fire Powell or announce his final pick quickly. Last week the president mused: "Maybe, just maybe, I'll have to change my mind about firing him?"

Powell has said he intends to serve out his term as chair and that he can't be removed by law.

"He goes out pretty soon, fortunately, because I think he's terrible," Trump added Wednesday.

The comments from the president came as Powell sat before Senate lawmakers for his second day of regularly scheduled testimony before Congress.

Powell told lawmakers that the central bank is "well-positioned to wait" on any interest rate adjustments until it has more clarity on how Trump's tariffs will affect inflation and the direction of the US economy.

The president's attacks on Powell intensified at the end of last week as Trump called for rates to drop from 4.25% to 4.5% to between 1% and 2% and said of Powell and the Fed's board of governors, "I don't know why the Board doesn’t override this Total and Complete Moron!"

Trump repeated some of those points in a Tuesday social media post, calling for rates "at least two to three points lower" and saying that Powell "will be in Congress today in order to explain, among other things, why he is refusing to lower the Rate."

"I hope Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come."

On Wednesday, Trump reiterated his oft-stated case for why Powell should lower rates by at least one percentage point immediately, citing "no inflation."

He also recounted an earlier face-to-face meeting with Powell, offering a mocking voice for Powell, and repeated his personal attacks by saying "I think he's a very stupid person actually" and calling him "an average mentally person."

Trump is not the only one calling for lower rates following the last meeting on June 18-19, when all central bank officials voted to keep rates unchanged for the fourth consecutive time.

Even some of Powell's fellow policymakers — Fed governors Michelle Bowman and Waller — have said in recent days that they now see cutting rates as soon as the Fed's next policy meeting in July due to recent mild inflation readings.

But other officials have pushed back on that urgency and warned that it is too soon to know the true effects of tariffs on inflation.

Federal Reserve Bank of Richmond President Thomas Barkin said Thursday tariffs likely to push inflation up over coming months, even though "I don’t expect the impact on inflation to be anywhere near as significant as what we just experienced” during the Covid-19 pandemic.

Trump has even mused about appointing himself Fed chair. One lawmaker asked Powell on Tuesday if that was even possible.

"I don’t know," Powell said, adding that it's "not a question for me."

Powell has not said if he also plans to leave the Fed's board after his chairmanship is up next May. His term as a Fed governor is not up until 2028.

And on Tuesday and Wednesday, he repeatedly dodged questions about Trump, Trump's policies, and the president's string of personal insults.

"All I want to do in what’s left of my time at the Fed is to have the economy be strong and have inflation be under control. I want to turn it over to my successor in that condition."

Source: Yahoofinance

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Adam

Economic

China is likely to step up efforts to use its clean-tech transition as a pathway to economic and geopolitical dominance, according to JPMorgan Chase & Co.’s global head of sustainable solutions.

The world’s second-largest economy “is leveraging its early investment into green technologies not just for economic benefit but for geopolitical advantage as well,” JPMorgan’s Chuka Umunna said during a panel at the Bloomberg Sustainable Business Summit on Thursday. “I think we are going to see that more pronounced, how these issues play into geopolitics.”

The point is that the “transition to a low-carbon economy and national security” are issues that “are coming closer and closer together,” he said.

Mainland China dominates clean-tech production, controlling over 70% of global manufacturing capacity across major segments, according to a recent study by BloombergNEF. The country’s continued commitment to the green transition stands in stark contrast to developments in the US, where the Trump administration has axed most of the pro-climate policies promoted by President Joe Biden.

JPMorgan Sees China Leveraging Clean Tech for Geopolitical Gain_1

Umunna said the US government is focused on achieving “energy dominance.” President Donald Trump’s public statements have centered on the goal of ratcheting up America’s energy supply by reviving the country’s fossil-fuel industry. But Umunna said the White House is also looking to other sources.

“The administration wants energy abundance, and to achieve that, you need a kind of all-of-the above approach,” Umunna said.

At JPMorgan, the assessment is that the Trump administration is “incredibly interested in nuclear, very interested in geothermal,” he said. “The US Congress has a degree of bipartisan support for some of the different types of hydrogen,” which is driven in large part by the rise in energy demand stemming from the development of artificial intelligence, he said.

At the same time, Trump’s vocal hostility toward the green transition has coincided with a recovery in green stocks. After sinking about 60% between the end of 2020 and 2024, the S&P Global Clean Energy Index is up roughly 13% so far in 2025.

“It’s been a very tough ride,” Umunna said. “But it does look like there are some — at least short-term — signals indicating perhaps we’re now at an inflection point.”

JPMorgan, which earlier this year joined its peers on Wall Street in quitting the Net-Zero Banking Alliance, remains “one of the biggest green investment banking businesses in the world,” Umunna said. “We made nearly $1 billion in revenue from green transactions or green companies last year. So for our clients, as for us, this is a really big commercial offer.”

Green stocks started to sink at the end of the pandemic, when inflation and interest rates started to rise. The development hobbled capital-intensive clean-tech projects whose growth models had relied heavily on borrowing. Those headwinds are now less of an issue, Umunna said.

“Some of the things that have been an impediment for the onward march of green economy stocks, like the higher rates environment, supply chain issues, permitting and planning reforms, there are quite positive signs that some of that will be resolved,” he said.

Even the likely inflationary fallout of Trump’s tariff war will probably be offset by monetary easing, Umunna said. That’s as JPMorgan’s analysts predict “a couple more cuts from the Bank of England this year,” and “at least another one” from the European Central Bank and the Federal Reserve, he said. “So that should hopefully help green economy stocks.”

Source: Bloomberg

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Damon

Economic

Contracts to buy previously owned U.S. homes increased more than expected in May, but higher mortgage rates remain a constraint for buyers.

The National Association of Realtors said on Thursday its Pending Home Sales Index, based on signed contracts, increased 1.8% to 72.6 last month. Sales rose in all four regions. Economists polled by Reuters had forecast contracts, which become sales after a month or two, would edge up 0.1%.

Pending home sales advanced 1.1% from a year earlier.

"Consistent job gains and rising wages are modestly helping the housing market, said Lawrence Yun, the NAR's chief economist. "However, mortgage rate fluctuations are the primary driver of homebuying decisions and impact housing affordability more than wage gains."

Source: Yahoo Finance

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Adam

Stocks

Wall Street woke up on Thursday to the scent of euphoria, as stock futures ticked upward on the back of a surging semiconductor sector. Micron Technology, often a backstage hand in the glitzy world of AI innovation, delivered a stellar earnings report that did more than lift its own shares by over 2.3%. It ignited a broader rally in chipmakers, a class of stocks now carrying the burden of national hopes, technological sovereignty, and market momentum. Nvidia touched yet another record. The Nasdaq hovered within whispering distance of its all-time high.

Yet, even as investors bask in the glow of AI's promise, a darker and more politically charged narrative simmers beneath the surface. Micron's success - and the sector-wide enthusiasm it inspired - coincides with increasingly chaotic signals from Washington, where President Donald Trump is reportedly considering announcing Jerome Powell's replacement months before the end of the Fed Chair's term. It's a move that has financial observers scrambling for their civics textbooks and central bankers revisiting their oaths of independence.

The Wall Street Journal reported that Donald Trump intends to name Powell's successor as soon as possible (probably by October, given that his term ends in May 2026). The aim is to send a message and put pressure on the current Fed chairman, who is considered too unruly. Kevin Warsh, Kevin Hassett, and Scott Bessent (who had already declined, I believe) are among the candidates being considered by the White House. The WSJ specifies that the US president is evaluating candidates based on their commitment to lowering rates and, I quote, their "made-for-TV" appeal.

Micron's earnings might reflect AI exuberance, but the rest of the macroeconomic picture is less rosy. Traders, clinging to Powell's careful rhetoric before Congress, still price in multiple rate cuts by year's end - an acknowledgment that despite robust corporate profits, the broader economy walks a tightrope between resilience and stagnation. Durable goods data and the final first-quarter GDP estimate - released this morning - offered clues. In a disquieting signal for the U.S. economy, goods exports in May fell by 5.2% month-over-month - the sharpest decline since the early pandemic turmoil of 2020. The steep drop suggests a weakening in global demand or a growing drag from trade tensions and tariffs, raising fresh concerns about the resilience of American manufacturing amid geopolitical uncertainty. Meanwhile, weekly jobless claims came in at 236,000 for the week ending June 21, slightly below economists’ expectations of 243,000, offering a sliver of reassurance that the labor market remains relatively stable.

But the real tell will be Friday's release of the Personal Consumption Expenditures report, the Fed's preferred inflation gauge, now shadowed by tariff threats and growing geopolitical unpredictability.

The market's early morning climb appears to be powered by a paradox. On one side is the dazzling optimism of AI and on the other, the creeping realization that monetary policy may become a political football in a high-stakes election year. If Trump's rumored nomination of a dovish Fed successor becomes reality, it could upend the Fed's credibility and further weaken the already-sliding dollar, which just hit a three-year low.

This confluence of events presents an unsettling picture. The same investors cheering Micron's forecast are also hedging against future inflation, recalibrating bond strategies, and squinting at the Fed with suspicion. Treasury yields are falling - but not too far.

In the background, subtle but telling corporate shifts are taking place. Meta poached three researchers from OpenAI, a reminder that in the world of AI, talent is the true currency. Coinbase, a once-embattled crypto platform, reached its highest close since 2022. Shell and BP plc sparked merger rumors, underlining the strategic reshuffling across industries, although it was denied by the parties. And Nike, bracing for what analysts call an “ugly” quarter, still managed to lift its stock ahead of earnings..

In other news, the US has managed to get other NATO members to pay more. Everyone congratulated each other yesterday, especially since Washington has tipped the balance back in Ukraine's favor in the conflict with Russia.

In Asia-Pacific markets, the picture is very mixed. Indices went from a 1.1% decline in South Korea, where the strength of US semiconductors has not spread, to a 1.5% gain in Japan. Australia and Hong Kong were down slightly, while India gained some ground. European leading indicators are bullish, with the Stoxx Europe 600 up 0.2%.

Source : marketscreener

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Michelle

Political

Middle East Situation

Iran would respond to any future U.S. attack by striking American military bases in the Middle East, Supreme Leader Ayatollah Ali Khamenei said on Thursday, in his first televised remarks since a ceasefire was reached between Iran and Israel.

Khamenei, 86, claimed victory after 12 days of war, culminating in an Iranian attack on the largest U.S. base in the region, located in Qatar, after Washington joined the Israeli strikes.

"The Islamic Republic slapped America in the face. It attacked one of the important American bases in the region," Khamenei said.

As in his last comments, released more than a week ago during the Israeli bombardment, he spoke from an undisclosed indoor location in front of a brown curtain, between an Iranian flag and a portrait of his predecessor Ruhollah Khomeini.

IRAN WILL NOT SURRENDER

In his pre-recorded remarks, aired on state television, Khamenei promised that Iran would not surrender despite U.S. President Donald Trump's calls.

"The U.S. President Trump unveiled the truth and made it clear that Americans won't be satisfied with anything less than surrender... such an event will never happen," Khamenei said.

"The fact that the Islamic Republic has access to important American centres in the region and can take action against them whenever it deems necessary is not a small incident, it is a major incident, and this incident can be repeated in the future if an attack is made," he added.

Trump said "sure" on Wednesday when asked if the United States would strike again if Iran rebuilt its nuclear enrichment programme.

Tehran has for decades denied accusations by Western leaders that it is seeking nuclear arms.

NO GAIN

Khamenei said the U.S. "gained no achievement" after it attacked Iranian nuclear sites, but that it entered the war to "save" Israel after Tehran's missiles broke through Israel's multi-layered defence system.

"The U.S. directly entered the war as it felt that if it did not get involved, the Zionist regime (Israel) would be fully destroyed. It entered the war to save it," he said.

"The U.S. attacked our nuclear facilities, but couldn't do any important deed... The U.S. president did abnormal showmanship and needed to do so," he added.

Trump said over the weekend that the U.S. deployment of 30,000-pound bombs had "obliterated" Iran's nuclear programme. However, this appeared to be contradicted by an initial assessment from one of his administration's intelligence agencies, according to three people familiar with the matter.

Israel's Prime Minister Benjamin Netanyahu also declared "a historic victory" on Tuesday, after the fragile ceasefire took effect, saying Israel had achieved its goal of removing Tehran's nuclear and ballistic missile threat.

Shortly after Khamenei's speech, Netanyahu posted a message with a picture of himself and Trump holding hands with the message: "We will continue to work together to defeat our common enemies."

Source: Reuters

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Adam

Commodity

Gold and silver prices are firmer in early U.S. trading Thursday, supported by a wilting U.S. dollar index that overnight hit a 3.5-year low. Precious metals gains are modest, however, as tensions in the middle east have significantly de-escalated this week. August gold was last up $6.00 at $3,348.40. July silver prices were last up $0.374 at $36.485.

Asian and European stocks were mixed to firmer overnight. U.S. stock indexes are pointed to firmer openings today in New York. Risk aversion has receded this week but trader/investor risk appetite is not robust, either. The Israel-Iran ceasefire appears to be holding.

President Trump on Wednesday slammed Fed Chairman Jerome Powell and said he has a few people in mind to replace him when his term expires next year. Reads a Barron’s headline today: “Trump may name next Fed chair early. Why it would fuel inflation and tank the dollar.” The headline suggests Trump’s new Fed chair pick would be very easy on monetary policy, which could prompt inflation and further depreciate the greenback.

The key outside markets today see the U.S. dollar index lower and hitting a 3.5-year low. Nymex crude oil futures prices are slightly up and trading around $65.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.27%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago Fed national activity index, the third estimate of first-quarter GDP, including the price indexes, durable goods orders, the advance economic indicators, pending home sales, and the Kansas City Fed manufacturing survey.

Gold price slightly up as U.S. dollar index slumps_1

Technically, August gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the June high of $3,476.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,300.00. First resistance is seen at Tuesday’s high of $3,385.00 and then at $3,400.00. First support is seen at Wednesday’s low of $3,325,50 and then at this week’s low of $3,308.30. Wyckoff's Market Rating: 6.5.

Gold price slightly up as U.S. dollar index slumps_2

July silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the June high of $37.405. The next downside price objective for the bears is closing prices below solid support at $35.00. First resistance is seen at the overnight high of $36.77 and then at $37.00. Next support is seen at $36.00 and then at Wednesday’s low of $35.63. Wyckoff's Market Rating: 7.0.

Kitco: source

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Adam

Bond

The dollar fell and US Treasuries rallied after a report that President Donald Trump is considering naming Federal Reserve Chair Jerome Powell’s successor well before the incumbent’s term is scheduled to end next May.

The Wall Street Journal said Trump may reveal his pick to run the Fed by September or October. The report follows weeks of lobbying by the president for Powell to lower borrowing costs.

Investors and analysts reckon Powell’s replacement will most likely share the president’s dovish bias, prompting speculation interest rates could eventually fall faster and deeper than markets are currently pricing. An early selection could also confuse markets by forcing them to monitor the monetary policy commentaries of Powell and his replacement.

“This increases the risk that Powell will become a ‘lame duck’ in his final months as Fed chair, and with it the risk of earlier interest rate cuts,” said Michael Pfister, an FX analyst at Commerzbank AG.

Treasuries Rally, Dollar Slumps as Trump Eyes Powell Successor_1

Potential contenders to succeed Powell include former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, National Economic Council Director Kevin Hassett, former World Bank President David Malpass and US Treasury Secretary Scott Bessent, Bloomberg News has previously reported.

Traders have been adding to bets on more US interest-rate cuts in the past days, as Fed officials including Waller and Michelle Bowman, two Trump nominees, appeared to support a move as early as July. The chance of a quarter-point cut in the next meeting rose from zero to 20% and the amount of easing expected by the end of the year jumped from 50 to 62 basis points in a week.

Last week, US rates traders amassed a record futures bet that whomever Trump appoints will lead the central bank to cut interest rates almost immediately. Two-year yields — the most sensitive to changes in monetary policy — fell almost 20 basis points over the past week to trade at 3.75% on Thursday, a seven-week low.

Wagers on lower interest rates are also weighing on the dollar, which weakened against all of its Group-of-10 peers. The Bloomberg’s Dollar Spot Index slumped 0.6% to the weakest level in over three years. Commerzbank’s Pfister forecasts the euro could climb to $1.18 in the coming days if policymakers continue to shift to favor earlier rate cuts.

“Powell continues to attract the heat of the Trump administration,” said Franceso Pesole, a currency strategist at ING. Now that other Fed officials “are openly disagreeing with his cautious stance, markets may well be quick to respond with a dovish re-rating of expectations to soft US data.”

Investors will get further evidence on the health of the US economy on Thursday, with jobless claims, durable goods orders, home sales and final first-quarter growth figures. Fed officials including Austan Goolsbee, Tom Barkin, Mary Daly, Beth Hammack and Michael Barr, are also set to speak.

Powell reiterated his message that officials need not rush to lower rates during his testimony before the Senate Banking Committee this week. He said recent economic data is backward looking and many economists expect “a meaningful increase in inflation” over the course of this year due to tariffs.

“Trump’s actual behavior in terms of appointments to the Fed has been reasonably orthodox,” Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management, said in comments prior to the WSJ report. “He of course appointed Powell himself. So one needs to be a little careful about taking all of the rhetoric at face value.”

What Bloomberg Strategists Say...

“The suggestion that Washington is seeking to assert more control over monetary policy could threaten the perceived independence of the US central bank. That won’t do much to improve the appeal of US assets. We are also approaching a seasonally weak period for the dollar. Since 2005, July has tended to be the weakest month for the Bloomberg Dollar Spot Index with an average decline of 0.6%.”

Conor Cooper, Macro Squawk. Click here for the full piece.

Still, traders in the currency options market have been ramping up bets that the dollar’s slide has room to run. One-month risk reversals — a key gauge of sentiment — swung sharply in favor of further downside this week. It was the ninth-largest bearish repricing in greenback options on record over a three-day window.

“Naming a ‘shadow’ Fed Chair is dollar-negative as it risks undermining the Fed’s credibility,” said Elias Haddad, a strategist at Brown Brothers Harriman & Co. “Conflicting signals between the official Chair and a perceived ‘shadow’ figure will increase market confusion, lead to mixed policy expectations, and erode the Fed’s image as a non-partisan institution.”