Trump Escalates Pressure on Fed Chair Powell Over Interest Rates, Targets Successor Options

President Donald Trump has intensified his campaign against Federal Reserve Chairman Jerome Powell, urging him to lower interest rates or step down amid criticism of the Fed's handling of the central bank's headquarters renovation project. Trump and senior officials, including OMB Director Russell Vought, accused Powell of mismanagement and overspending on the project, highlighting alleged luxury features and a budget increase from $1.8 billion to $2.5 billion, which Powell denied. Parallel to these criticisms, Trump is considering replacing Powell, who was originally nominated by Trump in 2018 and whose term ends in 2026, with several candidates including Treasury Secretary Scott Bessent, former Fed Governor Kevin Warsh, and economic advisor Kevin Hassett. Trump’s public pressure and politicization of the Fed's independence have raised concerns among economists and investors about potential impacts on U.S. financial stability. Despite Powell’s reappointment by President Biden in 2022, Trump’s persistent opposition and plans for a possible 'shadow chair' reflect ongoing tensions over interest rate policies. The debate highlights the fraught relationship between the executive branch and the Federal Reserve during a critical period for U.S. economic policy.