Trump Hints at New Fed Chair Choice and Issues Warning to Powell
Davos, Wednesday, 21 January 2026.
In Davos, President Trump signaled a replacement for Jerome Powell is imminent, starkly warning the Chair his life ‘won’t be very happy’ if he attempts to remain on the board.
Trump Hints at New Fed Chair Choice and Issues Warning to Powell
Speaking from the World Economic Forum in Davos on Wednesday, January 21, 2026, President Donald Trump escalated his campaign to reshape the Federal Reserve, revealing he has likely narrowed his search for a new Fed Chair to a single candidate [1]. In a marked intensification of rhetoric, the President also issued a stark warning to current Chair Jerome Powell regarding his potential future at the central bank. While Powell’s term as Chair expires in May 2026, his separate 14-year term as a governor extends through January 31, 2028, legally allowing him to remain on the board even after being replaced as leader [3]. When pressed on this possibility during an interview with CNBC, President Trump cautioned that if Powell attempts to stay on, “his life won’t be very, very happy, I don’t think” [4].
Developing Story Context
This ultimatum represents a significant shift in the administration’s strategy to reclaim monetary policy control. As detailed in our previous coverage, “Supreme Court Case Tests the Limits of Presidential Control Over the Federal Reserve”, the White House is already navigating a complex legal landscape involving a criminal probe into Chair Powell. The President’s latest comments in Switzerland suggest a move from legal maneuvering to direct pressure, aiming to clear the board entirely rather than simply replacing its leadership.
The Shortlist and the Hesitation
While the President declined to name his final pick, he noted that his list had been whittled down from three candidates to two, and now likely just one [1]. Treasury Secretary Scott Bessent indicated on January 20 that an official announcement could come as soon as the week of January 26 [3]. The selection process has reportedly included Kevin Warsh, a former Fed governor who was a finalist for the role in 2017, and Kevin Hassett, the current National Economic Council director [2]. However, the President expressed reservations about moving Hassett on January 16, telling his advisor directly, “I would lose you. It’s a serious concern to me,” citing the isolation of the Federal Reserve role where officials “don’t talk much” [2]. Another contender, Christopher Waller, recently polled as a favorite among CEOs [2].
Policy Friction and Political Obstacles
The urgency behind the replacement stems from the President’s continued dissatisfaction with Powell’s monetary policy, specifically regarding interest rate cuts. In his Davos interview, President Trump characterized Powell as “always too late,” arguing that the current Chair gets “spooked” by positive GDP numbers and fails to support market rallies [1]. This friction is compounded by a looming Department of Justice investigation into renovations at the Federal Reserve’s headquarters, a probe Powell has dismissed as a pretext for political intimidation [2]. The confirmation process for any new nominee faces its own hurdles; Senator Thom Tillis has vowed to block all Fed appointments until the Justice Department’s inquiry is resolved, potentially stalling the administration’s timeline [2][3].