Trump's Loyalty Test: Who Will Lead the Federal Reserve in 2026?

Is the US Federal Reserve's independence on the chopping block? President Donald Trump has issued a stark ultimatum for the next leader of the nation's central bank: keep interest rates low and never disagree with him. The statement is stoking fears about the future of an institution long shielded from political interference.

An Unprecedented Public Demand

In a lengthy post on his Truth Social platform on Tuesday, as interviews for a successor to outgoing Fed chief Jerome Powell were underway, Trump laid out his criteria. “I want my new Fed Chairman to lower Interest Rates if the Market is doing well, not destroy the Market for no reason whatsoever,” he wrote. “Anybody that disagrees with me will never be the Fed Chairman!”

Since returning to office in February, Trump has relentlessly pressured the Federal Reserve. He has publicly called Powell a “numbskull” and a “major loser” for not cutting rates as aggressively as he wants, even threatening his dismissal. This rhetoric challenges the longstanding convention of the central bank's independence from the executive branch.

A Strong Economy and the Field of Candidates

The pressure comes even as the Fed has already cut its benchmark interest rate three times this year, bringing it to a range of 3.5% to 3.75%. Trump has suggested it should be as low as 1%. While lower rates can stimulate the economy by making borrowing cheaper, aggressive cuts risk stoking inflation.

Ironically, recent economic data shows a surprisingly robust economy. The US Commerce Department reported that third-quarter GDP growth for 2025 was 4.3%, significantly higher than the 3.2% forecasted by Dow Jones analysts. According to the Bureau of Economic Affairs, this growth was largely driven by consumer spending and exports.

According to CNBC, the top candidates to replace Powell include Kevin Hassett, director of the National Economic Council; Kevin Warsh, a financier and former Fed governor; and Christopher Waller, a current Fed governor. Speaking to Al Jazeera, Michael Sandel, chief investment officer at Potomac River Capital, suggested Hassett appears to be the front-runner due to his close working relationship with Trump.