The dollar fell after the Wall Street Journal said Donald Trump is considering announcing his choice for the next Federal Reserve chairman early on his view Jerome Powell has been too slow to cut interest rates.
The currency weakened versus all its major peers in early Asian trade Thursday after the report said the President may announce Powell's replacement by September or October, citing people familiar with the matter. Potential replacements include Fed governor Kevin Warsh and National Economic Council director Kevin Hassett, the report said.
“Trump's nomination will amp up the pressure, to the point where we could have a shadow Fed chair before Powell steps down in May next year,” said Rodrigo Catril, strategist at National Australia Bank Ltd. in Sydney. “We think it's fair to suggest that the pressure on Powell to cut rates will increase, and that's adding to selling pressure on the dollar.”
Trump said on Wednesday he had three or four people in mind to succeed Powell, whose term as chair ends in May 2026. Trump has lashed out at the Fed's position to keep rates on hold this week, arguing for cuts and saying the central bank is keeping borrowing costs for the US government high.
Trump said earlier this month that he was considering successors for Powell and that they would come out “very soon.”
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