Trump’s war on the Fed: A loyalty test for Jerome Powell’s successor
Former US President Donald Trump has intensified his campaign against the Federal Reserve, targeting Chair Jerome Powell and other college board members. Harvard economist Kenneth Rogoff warns the strategy could weaken the Fed’s independence, drawing comparisons to political interference in unstable regimes.
Trump’s latest moves go beyond public criticism. He has accused Powell of criminal wrongdoing—a tactic that prevents the Fed from covering legal fees. This approach extends to other governors, with Trump using multiple government agencies to pressure them into compliance.
Rogoff believes the goal is not just to remove Powell but to intimidate the entire college board. He predicts Trump’s efforts may succeed, leading to a Fed Chair chosen for loyalty rather than expertise. Among the potential replacements, Kevin Hassett—Trump’s former White House economic advisor—stands out as a frontrunner.
Hassett, who once called Powell a ‘good man’ while downplaying investigations, aligns with Trump’s push for lower interest rates. Other candidates include Kevin Warsh, Rick Rieder, and Christopher Waller, but Hassett’s past loyalty makes him a favoured choice for the role in 2026.
The Fed’s autonomy now faces a direct challenge. If Trump’s strategy works, the next chair could prioritise political alignment over economic policy. Rogoff’s warning suggests the consequences may extend far beyond Jerome Powell’s tenure.
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