Donald Trump, the soon-to-be 47th president of the US, is reportedly planning to replace Federal Reserve Chair Jerome Powell with Kevin Warsh when Powell's term ends in 2026. Warsh, a former Fed governor and Wall Street heavyweight, is at the top of Trump's list. The plan would position Warsh as Treasury Secretary first before moving him into the Fed's top spot. Other names being considered for high-level economic roles include Marc Rowan, CEO of Apollo Global Management, and hedge fund manager Scott Bessent. Trump and Powell have a complicated history, with Trump wanting aggressive rate cuts and Powell refusing to comply. Trump's plans for tax cuts, infrastructure spending, and trade tariffs are likely to ignite inflation, requiring a Fed chair who is willing to cut rates. Economists warn that another round of conflicts between Trump and Powell is inevitable if Powell stays on. Warsh is known for being market-savvy and politically shrewd, and his appointment would likely lead to a major change in policy, focusing more on stimulating growth even at the risk of higher inflation. This has led to increased uncertainty in the market and revised expectations for interest rate cuts. The tension between the White House and the Fed is expected to escalate, and the challenge for the Fed is finding the right balance between growth and inflation.



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