Overview

• Trump is considering creating a 'shadow chair' to monitor and influence Fed policy until Jerome Powell’s term ends in May 2026.
• Evercore strategist Krishna Guha says the interim appointment would accelerate White House influence on rate markets without forcing Powell’s removal.
• Analysts warn the 'shadow chair' would struggle to sway Federal Open Market Committee decisions, which require seven votes for policy changes.
• Reported contenders for the role include former Fed Governor Kevin Warsh, Governor Christopher Waller, Treasury Secretary Scott Bessent and NEC Director Kevin Hassett.
• The plan emerges as May consumer prices rose 0.1%—lifting annual inflation to 2.4%—while the U.S. budget deficit is projected to near $2 trillion in 2025 with $1.2 trillion in financing costs.