Federal Reserve observers generally believe that former President Trump will not attempt to dismiss Fed Chair Jerome Powell before the end of his term in mid-2026. While the outcome is uncertain, experts agree that Powell is likely to serve out the final 18 months of his tenure.
Mark Spindel, founder of Potomac River Capital, expressed doubt that Trump would feel the need to pressure or attempt to remove Powell. Similarly, Michael Strain, Director of Economic Policy Studies at the American Enterprise Institute, echoed this sentiment, stating that Powell is likely to maintain his position until the end of his term, as removing him could result in market instability—a scenario Trump would want to avoid. Strain added that Trump usually responds to market trends and business news and would not favor instability in U.S. monetary policy.
Ian Katz, Managing Director at Capital Alpha, noted that Trump might be content with the Fed's general direction towards rate cuts. During the presidential campaign, there were rumors that Trump would target Powell, believing such actions could lead to significant market disruption. However, Trump had indicated he would not fire Powell, especially if he believed Powell was making the right decisions.
To prevent potential market turmoil, Scott Bessent, founder of Key Square Capital Management and a former economic adviser to Trump, suggested that Trump could nominate Powell's successor to join the White House economic team, allowing them to comment on Fed policy actions.
