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

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.

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. “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. Blinder said a shadow Fed chair would mean markets would have to make sense of two influential voices speaking about monetary policy at the same time, but offering potentially very different visions. “If they’re not singing from the same playbook, which seems likely, this is just going to cause confusion in markets,” said Blinder, a former Clinton economic adviser who is now a professor at Princeton University.