WASHINGTON: U.S. President Donald Trump announced he will select a nominee to fill an upcoming vacancy on the Federal Reserve’s Board of Governors by the end of the week. He also revealed that his search for a replacement for Fed Chair Jerome Powell has been narrowed to four candidates.
“I’ll be making that decision before the end of the week,“ Trump said regarding the replacement for Fed Governor Adriana Kugler, who unexpectedly announced her departure last week. Kugler will leave her position this Friday to return to academia at Georgetown University.
Trump clarified that selecting Kugler’s replacement—a role lasting only until January—differs from choosing Powell’s successor, whose term ends in May. However, the appointment could influence the Fed chair selection, as Trump indicated his shortlist includes economic adviser Kevin Hasset, former Fed governor Kevin Warsh, and two unnamed individuals, one believed to be current Fed Governor Christopher Waller.
“We’re also looking at the Fed chair, and that’s down to four people right now … Two Kevins and two other people,“ Trump said.
Earlier in the day, Trump told CNBC that Treasury Secretary Scott Bessent was no longer in contention for Fed chair, as Bessent preferred to remain in his current role. Trump also described Kugler’s early departure as a “pleasant surprise,“ providing an opportunity to appoint someone who could later be elevated to Fed chair.
Kugler’s replacement would initially serve only the remaining months of her term. However, Trump could signal his intent to nominate the same individual for a full 14-year term and as Powell’s successor, allowing them to influence policy discussions ahead of a formal transition.
“A lot of people say, when you do that, why don’t you just pick the person who is going to head up the Fed? That’s a possibility too,“ Trump said.
The president has repeatedly criticized Powell for not cutting interest rates since Trump returned to office in January. Despite economic indicators showing slowing growth and a weakening job market, inflation remains above the Fed’s 2% target, complicating policy decisions.
Kugler’s replacement will require Senate confirmation, as will any subsequent nomination for a full term or Fed chairmanship.
Meanwhile, Trump’s abrupt firing of Bureau of Labor Statistics Commissioner Erika McEntarfer—amid unsubstantiated claims of data manipulation—has raised concerns about the independence of U.S. economic reporting. Economists warn that Trump’s trade policies may exacerbate inflation and labor market instability, further complicating the Fed’s mandate to balance price stability and employment.
Michael Strain of the American Enterprise Institute cautioned that perceptions of political interference in key economic appointments could undermine confidence in U.S. institutions. “If you appoint somebody who’s perceived to be a lackey as the Fed chair, take the BLS freakout and multiply by 1,000,“ he said. – Reuters