Trump Says “Numbskull” Jerome Powell Will Be Out in a Few Months

Even as the weather starts to cool in the final days of October, the clash between President Donald Trump and Federal Reserve Chairman Jerome Powell continues to heat up. In the latest verbal salvo, the President had plenty to say about Powell’s performance as Fed chairman.

While addressing business leaders on a visit to Japan, Trump called the central bank head Jerome “Too Late” Powell. Certainly, this wasn’t the first time the President gave Powell that moniker for delaying interest-rate cuts.

Trump explained, “Somebody gave me a bad reference of him and I put him based on some guy that turned out to be not so hot.” The President then added, “We got a bad Fed guy, but he’ll be out of there in a few months.”

Powell’s term as Fed chairman is scheduled to end on May 15, 2026. Consequently, Trump’s statement may spark discussion about whether the President might take action to remove Powell from his post this year.

Courtesy: Liz Ann Sonders

At the center of the Trump-Powell friction are interest rates, which remain elevated but are finally starting to come down. Rates on household credit card debts and other types of debts could be reduced if interest rates continue to decline, which would provide much-needed relief to American families.

Who might replace Powell if he’s forcibly removed from his position in the next few months? Reportedly, Treasury Secretary Scott Bessent provided a short list for the Fed chair position.

That short list includes National Economic Council Director Kevin Hassett, former Fed governor Kevin Warsh, current Fed governors Christopher Waller and Michelle Bowman, and BlackRock executive Rick Rieder. The timeline to a new Fed chair could be shorter than some people expect, as Trump recently stated, “I think he’s done a bad job, but he’s going to be out pretty soon anyway. In eight months, he’ll be out.”

This scenario, if it plays out, would have Powell out in mid-March as opposed to his currently scheduled May exit. Meanwhile, Powell has repeatedly declared that he will not leave his Fed chair post early.

Courtesy: Augur Infinity

The ramped-up battle between the President and Powell comes during a crucial time for the financial markets. Powell’s Federal Reserve is about to make an interest-rate cut decision this week, possibly leading to disruptions in the balance between various U.S. Treasury yields.

It’s difficult to know the exact course of interest rates in the near term. What is certain, however, is that the friction is getting more intense between the Powell and the President. For instance, Trump recently exclaimed, “People aren’t able to buy a house because this guy is a numbskull. He keeps the rates too high, and is probably doing it for political reasons.”

Moreover, Trump reiterated his view that the benchmark interest rate should be three percentage points lower than it is currently. When the Federal Open Market Committee meets on Wednesday, it is widely expected to leave the policy rate at its current range of 4.25% to 4.5%.

Needless to say, an unexpectedly early exit for Powell would shake up the bond, stock, and commodity markets. So, keep your eyes peeled for further developments on this matter, which seem to be coming in on a weekly or even a daily basis.