Trump to Announce Next Fed Chair in January...Considers Lawsuit Against Powell

President Donald Trump of the United States announced plans to reveal his nominee for the next Federal Reserve (Fed) Chair in January, and reiterated that he may file a lawsuit against current Fed Chair Jerome Powell, thereby increasing pressure on Powell.

According to Bloomberg and other sources, President Trump, during a joint press conference with Israeli Prime Minister Benjamin Netanyahu at Mar-a-Lago, Florida, on the 29th (local time), was asked if he had a preferred candidate for the Fed Chair. He responded, "I still do. Nothing has changed," making these remarks.

Donald Trump, President of the United States. Photo by Getty Images Yonhap News

President Trump did not specify who the leading candidate for the Fed Chair position is, but stated, "I will make an announcement sometime in January."

Currently, Trump's chief economic advisor, Kevin Hassett, Chairman of the White House National Economic Council (NEC), is considered the most prominent candidate for the next Fed Chair. Other names being discussed include former Fed Governor Kevin Warsh, Fed Governor Christopher Waller, Fed Governor Michelle Bowman, and Rick Rieder, Chief Investment Officer (CIO) of Global Fixed Income at BlackRock.

Earlier this month, President Trump stated that he had narrowed down the list of Fed Chair candidates to one, but later mentioned that he was considering several candidates and highly praised multiple individuals who made the final shortlist.

President Trump once again launched an attack against Chair Powell. He argued that the cost of renovating the Fed building was excessive, stating, "That person (Powell) is simply incompetent. We may very well sue him." He added, "I want to remove him," and "I still can do that."

President Trump has previously expressed dissatisfaction with the Fed's failure to cut the benchmark interest rate before September, and in August, he mentioned the possibility of filing a lawsuit over what he claimed was excessive renovation spending at the Fed under Powell's supervision. In July, he also stated that if abuse of authority by the Chair regarding renovation costs was revealed, it could constitute 'just cause' for dismissal.

Chair Powell's term as Fed Chair runs until May next year, but his term as a Fed Governor extends until 2028. Powell has not announced whether he will resign after his term as Chair ends. If Powell remains, President Trump would not be able to appoint his own person as a Fed Governor. Observers are noting that Trump's remarks may be part of a strategy to pressure Powell to step down early, allowing Trump to appoint a new Chair and secure vacancies on the Fed Board.