Donald Trump slams Fed Chair Powell as ‘terrible,’ hints at replacement: ‘I know three or four people’

“I know within three or four people who I’m going to pick,” Trump told reporters at The Hague on the sidelines of NATO summit, when asked if he is interviewing candidates to replace Powell.

Shortlist emerges for next Fed chair

According to Reuters, Trump’s list of top contenders includes:

Former Fed Governor Kevin Warsh

National Economic Council head Kevin Hassett

Current Fed Governor Christopher Waller

Treasury Secretary Scott Bessent

Hassett declined to answer directly, when asked Wednesday if he had discussed the potential replacement with Trump, saying, “I think the President will choose the person that he likes, and it’s not going to be Jay Powell.”

Powell warns of inflation from tariffs

Testifying before Congress on Wednesday (June 25), Chair Powell acknowledged that recent inflation readings had been more moderate than expected, but he warned that new tariffs could change that.

“Higher tariffs could push up inflation this summer,” Powell told a US Senate panel. While tariffs are often considered one-time price shocks, he noted, “that is not a law of nature.”

“If it comes in quickly and it is over and done then yes, very likely it is a one-time thing,” Powell said. “But it is a risk we feel. As the people who are supposed to keep stable prices, we need to manage that risk.”

Fed cautious on rate cuts

The Federal Reserve has kept its benchmark interest rate steady between 4.25% and 4.5% since December. While many still expect rate cuts later this year, Powell emphasised the importance of clarity on the inflation outlook before taking action.

“We should start to see this over the summer, in the June number and the July number,” he said. “If we don’t, we are perfectly open to the idea that the pass-through [of tariffs to consumers] will be less than we think — and if we do, that will matter for policy.”

Republican pressure builds

During back-to-back hearings in the House and Senate this week, Republican lawmakers pressed Powell on why he had not already moved to cut rates. Powell defended the Fed’s caution, citing the uncertain inflation trajectory due to rising import taxes.

“The effects of tariffs could be large or small. It is just something you want to approach carefully,” Powell told senators.