Trump's campaign is exploring measures to exclude current Federal Reserve Chairman Powell if Trump is re-elected president.

Scott Bessant, Trump's economic adviser, suggested in an interview with Barron's that Congress could approve a new Fed chairman more than a year before Powell's term ends in May 2026. This would make the new nominee the de facto leader for the remainder of Powell's term, potentially weakening Powell's influence.

Bessant, who is also the founder of hedge fund Key Square Group, is rumored to be one of the candidates for Treasury Secretary in Trump's second administration. He told Barron's that a new Fed chairman could be nominated as early as possible and create a role of "shadow Fed chairman." He explained that based on the concept of forward guidance, once there is a "shadow Fed chairman", Powell's remarks may no longer be taken seriously.

The Trump campaign team praised the plan. In the second half of Trump's last term, his relationship with Powell became tense because Powell rejected the White House's request to stimulate the economy by cutting interest rates to help Trump's re-election.

However, Bessant clarified that this was just his personal idea, not Trump's policy proposition.

Ed Yardeni, a veteran Wall Street figure and president of Yardeni Research, described this as a "terrible" idea. He believes that the "shadow Fed chairman" will create confusion in the market and make it difficult for investors to judge whose opinions are more important in the Fed's policy-making committee, the FOMC. He emphasized that the independence of the Fed is essential to formulating responsible monetary policy, which is centered on stable prices.