After NATO Summit, "Powell Will Be Gone Soon"
Powell Reaffirms Cautious Stance for Second Consecutive Day
At Senate, "Difficult to Predict Tariff Impact...A Cautious Approach Needed"
On June 25 (local time), U.S. President Donald Trump announced that he had narrowed down the list of candidates to succeed Jerome Powell, the current Chair of the Federal Reserve (Fed), with whom he has been in conflict over interest rate cuts, to three or four individuals. Chair Powell, despite President Trump's repeated pressure to lower rates, reaffirmed for the second consecutive day his stance that it is difficult to predict the impact of tariffs on prices and that a cautious monetary policy should be maintained.
At a press conference following the North Atlantic Treaty Organization (NATO) summit in The Hague, Netherlands, President Trump was asked about his plans to replace Chair Powell and responded, "I think he is terrible. Fortunately, he will be gone soon."
President Trump did not provide specific details regarding the pool of candidates for the next Fed Chair or the timing of the appointment. Powell's term is set to run until May 2026.
Earlier this month, President Trump indicated that he would announce the next Fed Chair "soon." This has been interpreted as an attempt to hasten Powell's lame-duck status by nominating someone more aligned with his policy direction.
Currently, candidates being mentioned for the next Fed Chair include U.S. Treasury Secretary Scott Besant and former Fed Governor Kevin Warsh. Warsh was previously considered for the position of Treasury Secretary at the start of Trump's second administration, and President Trump described him as a "very highly regarded individual."
Since his candidacy, President Trump has continuously demanded interest rate cuts from Chair Powell. After taking office, he has openly criticized Powell, using terms such as "idiot" and "the man who is always too late." On this day as well, he strongly condemned Powell, calling him "a very stupid and political person."
Despite this pressure, the Fed maintained its benchmark interest rate at 4.25-4.5% at the Federal Open Market Committee (FOMC) regular meeting on June 18. The Fed has maintained this freeze throughout President Trump's tenure.
Chair Powell has maintained his position that he will not rush monetary easing, despite President Trump's persistent pressure to lower rates.
Appearing before the U.S. Senate Banking Committee for the semiannual monetary policy report, Powell stated, "Frankly, it is very difficult to predict how much of the tariff burden will be reflected in inflation," adding, "The impact of tariffs could be large or small, so we need to proceed cautiously." He further warned, "If we make a mistake, people will pay the price for a long time."
This is interpreted as an indication that he will not pursue an early rate cut until the actual impact of tariffs on the economy has been thoroughly assessed.
At a House hearing the previous day, Powell also addressed the possibility of a rate cut in July, stating, "If inflationary pressures remain subdued, we could resume cuts," but added, "I don't want to single out any particular meeting. The economy remains strong, so there is no need to rush." He specifically noted that tariffs imposed between June and August could have a significant impact on prices and the broader economy, drawing a clear line against calls for a July rate cut.
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