Breaking: Trump Interviewing Fed Chair Candidates as Powell Refuses Rate Cut

US President Donald Trump has clarified he has a shortlist of three or four people in mind to replace Jerome Powell as the Federal Reserve Chair when his term expires in May next year.

Trump, who has been openly critical of Jerome Powell’s policies and decisions, recently expressed his frustrations during a press conference at the NATO summit in The Hague.

Jerome Powell Replacements for Fed Chair

In a direct attack on Jerome Powell, President Donald Trump labelled the Fed Chair as a “very stupid person,” questioning his intelligence and capability in handling the economy. “I think he’s a very stupid person, actually,” Trump said, continuing his criticism by calling Powell “terrible” and “average mentally.” Trump emphasized that Powell’s handling of interest rates has been detrimental to the U.S. economy.

Trump also expressed concern over the long-term financial costs tied to Powell’s decisions. “For YEARS we’re gonna be paying for him! […] We’re gonna end up paying 2 points or 3 points more [on the debt!],” Trump remarked, adding that a 3-point increase would amount to $900 billion a year in debt payments. According to Trump, this is all because Powell “doesn’t want to lower the rate.”

Meanwhile, as per Polymarket, the leading candidates for the role include former Fed Chair Governor Kevin Warsh, National Economic Council Director Kevin Hassett, current Federal Reserve Governor Christopher Waller, and Treasury Secretary Scott Bessent.

Fed Chair Powell Approach to Interest Rates

Whereas Trump has been continually insisting on slashing interest rates aggressively, Fed Chair Powell has dealt with it cautiously. Powell, in recent Congressional testimony, has admitted that the higher tariffs could put upward pressure on inflation but has said that there had not yet been any marked increases in inflation.

Powell underlined that the Federal Reserve would make its decisions via observation of the overall economic conditions. He also indicated that further reductions in interest rates in 2025 were possible should inflation subside, or the labor market were to falter.

Nevertheless, Trump has maintained that the reluctance of the Federal Reserve to reduce interest rates is killing the economy. At the same time, the president is also critical of Fed Chair Powell beyond monetary policy. He has also hinted that there is political motivation on Powell since his reluctance to lower the interest rates might be politically motivated rather than economically based.

Lutnick Perspective on Interest Rates and Tariffs

Howard Lutnick, CEO of Cantor Fitzgerald, also weighed in on the ongoing debate regarding interest rates and tariffs. Lutnick criticized Fed Chair Powell for overlooking the substantial revenue generated from tariffs, arguing that this revenue could be used to reduce the deficit and lower borrowing costs.

“Our current run rate exceeds $30 billion per month,” Lutnick noted, suggesting that these revenues should be factored into the decision to lower interest rates.

Lutnick emphasized that reducing interest rates would have significant benefits for the U.S. economy, including lowering the country’s deficit and stimulating growth. “Each 1% cut saves the U.S. hundreds of billions of dollars in interest payments,” he said, adding that such a move would ultimately support higher tax revenues and help reduce the federal deficit. These views align with Trump’s perspective, reinforcing the president’s push for more aggressive monetary policy.