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Trump Signals Fed Overhaul, Plans to Replace Powell

  //house-home.news-articles.net/content/2026/02/2 .. ignals-fed-overhaul-plans-to-replace-powell.html
  Published in House and Home on Friday, February 20th 2026 at 6:52 GMT by Global News
      Locales: District of Columbia, New York, UNITED STATES

WASHINGTON - Former President Donald Trump signaled his intention to overhaul the leadership of the Federal Reserve, stating he will select a "brilliant" replacement for current Chair Jerome Powell when Powell's term concludes in May 2026. This declaration, made during a Fox News interview on Friday, February 20th, 2026, intensifies speculation about the future direction of U.S. monetary policy and raises questions about the continued independence of the central bank.

Powell, initially nominated by Trump in 2018, has become a frequent target of the former president's criticism due to the Federal Reserve's aggressive interest rate hikes implemented over the past two years in an attempt to curb persistent inflation. Trump consistently argues that these rate increases are damaging the U.S. economy, a claim that, while politically charged, resonates with some segments of the population feeling the pinch of higher borrowing costs.

"He's raised interest rates," Trump reiterated in the interview. "He's destroying our economy. I'm going to pick a brilliant person who understands, who knows what they're doing." This language suggests Trump seeks a Fed chair who will prioritize economic growth, potentially even at the risk of higher inflation, a stark contrast to the current focus on price stability.

The Erosion of Fed Independence?

The announcement is not simply about personnel; it's a potential challenge to the long-held tradition of Federal Reserve independence. For decades, the Fed has operated with a degree of autonomy from political pressure, allowing it to make decisions based on economic data and long-term stability rather than short-term political considerations. Trump's pledge to install a chair who aligns with his "views on the economy" raises concerns that this independence could be compromised.

Experts warn that politicizing the Federal Reserve could have serious consequences. A Fed chair beholden to political pressure might be inclined to lower interest rates to stimulate the economy before inflation is truly under control, potentially leading to a resurgence of price increases and undermining the Fed's credibility. Conversely, a chair pressured to maintain low rates could exacerbate asset bubbles and create financial instability.

Who Could Be in the Running?

Speculation is already rampant regarding potential candidates. While Trump offered no specific names, observers are examining individuals who have publicly expressed views sympathetic to his economic policies. Several economists and former government officials are being mentioned as possibilities.

One name frequently cited is Arthur Laffer, a supply-side economist who has long advocated for tax cuts and deregulation. Laffer served on Trump's economic advisory team and has been a vocal critic of the Federal Reserve's current policies. Another potential candidate is Stephen Moore, also a proponent of supply-side economics and a former economic advisor to Trump. Moore has consistently argued for lower taxes and less government regulation, positions that align with Trump's broader economic agenda.

Another potential, and perhaps less predictable, choice could come from within the current Republican political structure. Some analysts suggest Trump might consider a prominent Senator with economic expertise, potentially someone from the Senate Banking Committee, to ensure greater congressional support for his economic policies.

However, choosing someone without a strong background in monetary policy could pose significant risks. The Federal Reserve chair requires a deep understanding of complex economic issues and the ability to navigate international financial markets. A lack of expertise could lead to policy errors with far-reaching consequences.

The Broader Economic Context

Trump's timing is noteworthy. While inflation has cooled from its peak in 2023, it remains above the Federal Reserve's 2% target. The U.S. economy has shown resilience, but there are growing concerns about a potential slowdown. The unemployment rate remains low, but some sectors are showing signs of weakness. Against this backdrop, Trump's promise to appoint a Fed chair who prioritizes growth over inflation could appeal to voters concerned about the rising cost of living and the health of the economy.

The coming months will be crucial as the 2026 election cycle heats up. Trump's commitment to reshaping the Federal Reserve will undoubtedly become a central issue in the debate over the future of U.S. economic policy.