When Federal Reserve Chair Jerome H. Powell’s leadership term expires next May, President Trump will almost certainly name someone new to the top job. But Powell doesn’t have to leave the Fed. In fact, he could remain on the Board of Governors until 2028—years into Trump’s second term.
That possibility, once remote, is now being taken seriously inside and outside the central bank and the White House. It’s also beginning to shape the way Trump is approaching the one near-term vacancy he is guaranteed: the seat being vacated Friday by Governor Adriana Kugler.
Trump has said he is leaning toward filling that seat temporarily, with a short-term appointment that could later be swapped out. But the clock is ticking. If Powell decides to remain on the Board after his chairmanship ends, the Kugler seat may be the only chance Trump gets to install a successor before May—and perhaps the only Fed governor he gets to appoint at all.
That would leave Trump attempting to reshape Fed policy with just one new ally on a seven-member board, five of whom are Democratic-appointed and likely to remain through 2028 or beyond.
It’s a situation with few modern precedents—but one powerful historical parallel: the postwar standoff between President Harry Truman and Fed Chair Marriner S. Eccles.
The Eccles Fed Crisis Of 1948-1951
In 1948, after fourteen years as chair, Eccles was effectively demoted. Truman declined to reappoint him and named Thomas McCabe in his place. Eccles, however, did not resign. His underlying term as a governor still had three years to run. He remained on the Board, and soon found himself leading internal resistance to a White House effort to hold down long-term interest rates to finance postwar debt.
Eccles helped rally the Fed’s internal opposition to what he called “monetary subservience,” eventually forcing a confrontation with the Treasury Department and the White House. That conflict culminated in the 1951 Treasury-Fed Accord—a foundational moment in the history of American central banking, marking the start of the Fed’s modern independence.
At the time, Eccles’s refusal to step aside was controversial. Today, it is largely forgotten. But with Trump poised to reshape the Fed and Powell signaling no intention to leave, Eccles’s playbook may be newly relevant.
The Trump Calculation
The immediate question facing the White House is what to do with the Kugler vacancy. The term formally expires on January 31, 2026, but any appointee can stay on the Board after that until a replacement is confirmed—meaning the same seat could be filled twice during Trump’s term: once now, and again early next year.
Trump told reporters this week he is “probably going with the temp,” suggesting he may first appoint a short-term placeholder rather than his preferred successor to Powell. But time is limited. The Senate is not scheduled to return until September, and a permanent appointment would require confirmation not only to the Board seat but separately to the chairmanship—and possibly a new 14-year term as governor.
If Powell were to step down from the Board next year, the path would be clear. But if he chooses to stay—as Eccles did—the window narrows. Trump could still name a chair, but he would have to choose from among the sitting governors. At the moment, two of them—Christopher Waller and Michelle Bowman—are Trump appointees.
That makes the Kugler seat a kind of policy pivot point. If Trump wants to nominate someone to the chair who is not on the board now—perhaps former governor Kevin Warsh or White House economic adviser Kevin Hassett—he would need to make the appointment either now or in January—unless Powell steps down from his governor seat next year, opening a second seat.
The Federal Open Market Committee (FOMC), which sets U.S. monetary policy, includes 12 voting members: the seven members of the Board of Governors and five of the 12 regional Federal Reserve Bank presidents. The president of the New York Fed is a permanent voting member, while four other regional bank presidents serve one-year rotating terms. Although all 12 regional presidents attend meetings and participate in discussions, only the designated five vote on policy decisions. Currently, the presidents of the Federal Reserve Banks of Boston, Chicago, St. Louis, and Kansas City are voting members of the committee. In January, those votes will go to the chiefs of the Fed banks of Cleveland, Philadelphia, Dallas, and Minneapolis.
Damaged Goods?
Installing a “chair-in-waiting” now may seem like a solution. But analysts warn that such a nominee could be politically compromised from the start—expected to publicly signal alignment with Trump’s calls for aggressive rate cuts, yet reliant on the support of fellow governors to command influence.
Trump has been characteristically blunt in his criticism of Powell, calling him a “disaster” and nicknaming him “Too Late,” a reference to Powell’s tardy reaction to inflation under Biden and refusal to cut interest rates now that inflation has been running below the Fed’s target for several months. Trump has said he wants to replace Powell with someone who would “get interest rates down fast.”
The market current anticipates a cut in September and at least one more by the end of the year. Swaps prices suggest the Fed will cut three or four more times the following year, bringing the Fed’s benchmark down to around three percent.
That tension has led some within the administration to float names like Warsh, Hassett, or Judy Shelton as potential successors—figures who may be more politically aligned with Trump but whose nominations could face stiffer Senate opposition. For now, Trump has said Treasury Secretary Scott Bessent is no longer under consideration for the Fed role, but Bessent and others close to the president are involved in vetting candidates. Some in the administration believe that Bessent might become a candidate for the top job next year if Powell frees up the governor seat by resigning.
What Powell Might Do
For now, Powell has not said whether he plans to stay on the Board after his term as chair ends. But if he does, he would be following the precise letter of the law—governors serve 14-year terms and may remain until a successor is confirmed.
He would also be stepping back into history.
Eccles, writing in 1951, reflected on his decision to remain on the Board after Truman tried to push him out: “I was not going to make it easy for them to give away the independence we had built.”
If Powell feels similarly—and if the political pressure on the Fed intensifies—he may find it more important to stay than to go.
And if that happens, a president who once complained that Powell was “his” appointment gone wrong may discover that, like Truman before him, he’s left fighting the central bank’s leader long after removing the title.
Some inside the administration believe a compromise—something like a new Fed-Treasury accord—may be possible. In this scenario, Trump would agree to appoint Waller as chairman in exchange for Powell resigning his governorship, giving Trump the ability to fill another board seat. While Waller is a Trump appointee and dissented (along with Bowman) at the Fed’s last meeting, saying he would have cut interest rates, he is well-respected by his Fed colleagues and would likely be seen as less political than Hassett, a longtime Trump ally and a member of the current administration.
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