Trump may name a 'shadow' Fed chair, an unprecedented development in American history

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https://www.cnn.com/2025/06/27/business/trump-fed-chair-jerome-powell-replacement

Trump may name a ‘shadow’ Fed chair, an unprecedented development in American history
Analysis by Bryan Mena and Matt Egan, CNN
Updated 5:12 PM EDT, Fri June 27, 2025

Washington (CNN) — President Donald Trump said last week that he will announce his pick to succeed Federal Reserve Chair Jerome Powell “very soon.” The problem is that Powell still has 11 months left until the end of his term.

Trump remains frustrated as ever with the Fed because it has not yet lowered interest rates. He has relentlessly attacked Powell for months. But announcing a Fed chair nominee this far in advance — if he makes good on that plan — would be an unprecedented development in the central bank’s 111-year history.

This person would effectively be acting as America’s “shadow” Fed chair — a proposal Scott Bessent first floated last year before he became Trump’s Treasury secretary. Such an extraordinary move could undermine the current Fed chief and intensify the uncertainty that has bedeviled the US economy since Trump took office, former Fed officials and academics tell CNN.

On Friday, Trump took the idea one step further, saying he specifically wants someone in the job who will cut interest rates.

But the idea of a shadow chair drew concerns from a number of experts who spoke to CNN.

“It’s an absolutely horrible idea,” Alan Blinder, who served as the No. 2 official at the Fed during the mid-1990s, told CNN in a phone interview.

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