Powell's "to stay or go" controversy resurfaces! As the countdown to the change of leadership at the Federal Reserve begins, Trump hints that Powell may still be fired.

United States President Donald Trump hinted that he has a very preferred candidate for the next Federal Reserve chairman, but is not in a hurry to announce. At the same time, Trump also indicated that he may still choose to dismiss current Federal Reserve leader Jerome Powell. When asked if he had a favorite candidate for the Federal Reserve chairman, Trump said at a press conference on Monday, "I do, still do - nothing has changed." "I will announce him at the appropriate time. There is still plenty of time." Trump also added that Powell "should resign immediately," and that he "really wants to fire him." The returning President of the United States had come close to firing Federal Reserve Chairman Powell in July, but backed down after negative reactions in financial markets and feedback from people like Bostic, expressing concerns that the move might threaten the independence of the Federal Reserve and disrupt the markets. "Maybe I could still (do it)." Trump told reporters at his Mar-a-Lago estate in Florida. Trump did not specify who his favorite candidate for Federal Reserve chairman is at the press conference, stating that he will announce it "at some point in January." Kevin Hassett, director of the White House National Economic Council, who has a close relationship with Trump, has long been seen as the frontrunner for the next Federal Reserve chairman, but Trump has also expressed interest in former Federal Reserve Governor Kevin Warsh. Other contenders in the selection process include current Federal Reserve board members Christopher Waller and Michelle Bowman, as well as Rick Rieder, a top executive from the American asset management giant BlackRock. It is worth noting that Trump has made multiple vague and sometimes contradictory statements on his decision-making process for the new Federal Reserve chief. Earlier in December, the U.S. president stated that he had narrowed down the range of candidates for the Federal Reserve chairman to just one person, but later said he was considering multiple candidates and praised several names on the shortlist. Trump has long criticized Powell, whom he selected as the chairman of the Federal Reserve in his first term. The U.S. president has repeatedly expressed his strong desire for the next Federal Reserve chairman to be more proactive in the rate-cutting process, as the White House hopes to significantly reduce mortgage costs to promote economic growth and consolidate its voter and support base in the midterm election year. The Federal Reserve has cut its benchmark interest rate in the last three meetings, but some Federal Reserve officials hinted in December that they may only cut rates once in 2026. On Monday, Trump said he is still considering filing a lawsuit against Powell for the Federal Reserve's ongoing renovation project, citing "gross incompetence" as the reason. Powell's term as chairman will end in May 2026, but his term on the Federal Reserve Board is not set to expire until 2028. Powell has not indicated whether he will step down when his term as chairman ends. If he chooses to stay, Powell, who is committed to maintaining the independence of the Federal Reserve's monetary policy, would make it impossible for Trump to appoint another new member to the Federal Reserve Board. It is worth noting that there have been reports in the media that there is a loud opposition/concern within Wall Street (especially among bond market participants) regarding Trump's nomination of Kevin Hassett as the next Federal Reserve chairman: some large bond investment institutions have expressed to the U.S. Treasury Department that if Hassett takes the helm, the independence of Federal Reserve monetary policy and expectation management is more likely to be questioned by the market, and they are concerned that he may push for a more aggressive or "indiscriminate" rate-cutting process to cater to the White House, leading to a reevaluation of inflation and "term premium," ultimately posing an upside risk to long-term yields of 10 years and above, a scenario the Trump administration least wants to see. Several senior traders and institutional strategists interviewed have stated that if current Federal Reserve board member Christopher Waller were to be appointed, the market would more likely give a positive response in terms of "continuity/stronger independence." Some media reports have directly stated that he is seen as a more preferred choice by market participants because he is "considered to have a more independent monetary policy stance."