President Trump is considering firing Powell; who will replace him as the new chairman of the Federal Reserve (FED)?

The U.S. government recently publicly criticized Federal Reserve Chairman Powell for spending too much on renovations at headquarters. It was reported that President Trump considered firing Powell but later dropped the idea. Meanwhile, some members of the Federal Reserve Board of Governors urged Powell to cut interest rates as soon as possible.

Firing him before Powell's term ends in 2026 would break a long-standing tradition of the Federal Reserve and threaten its independence. Investors are concerned that this would turn the Federal Reserve into a political tool, raising borrowing costs for businesses and consumers, and undermining confidence in U.S. monetary policy.

Despite the uncertainty, trading platforms like Polymarket have started offering odds on potential candidates to succeed Powell.

As of Sunday (July 20), the most well-known names include:

Kevin Warsh - 24% chance

Warsh served as a member of the Federal Reserve Board of Governors from 2006 to 2011, and was replaced by Trump in 2017, with Powell taking over his position on the Federal Reserve Board of Governors. Today, Warsh strongly advocates for lowering interest rates and believes tariffs will not lead to inflation. He recently stated, "The central bank has lost credibility, and we do not need to maintain the status quo - the Federal Reserve needs institutional reform." However, some economists, including Neil Dutta, believe Warsh is the worst choice.

Scott Bessent - 20% chance

Trump's financial advisor is considered a loyal supporter of his and is being considered by the president to serve as the chair of The Federal Reserve (FED). He recently stated that he hopes Bessent will continue in his current position. Although there are expectations that Bessent can stabilize the market, he did not hesitate to stand by Trump during the stock market sell-off. Economist Paul Krugman warned that someone like Bessent, once appointed, might lack independence.

Kevin Hassett - 12% chance

Hassett served as the Director of the National Economic Council and openly criticized the Federal Reserve's reform budget. He proposed lowering interest rates by 3 percentage points, to which Trump responded, "That's great." However, whether he can gain Senate approval remains a question.

Christopher Waller — 12% chance

The current member of the Federal Reserve Board of Governors is a low-profile candidate, possessing both independence and academic credentials. After warning about the slowdown in private sector job growth, he urged the Federal Reserve to cut interest rates at the next meeting. Compared to those candidates who are more politically inclined, Waller is considered a "stable, rational, and convincing" choice.