Kudlow Predicts Trump Will 'Take Over' Federal Reserve After Powell Departs

Former White House economic adviser Larry Kudlow said President Donald Trump will "take the Fed over" when Federal Reserve Chair Jerome Powell leaves in May, predicting a White House-led overhaul of the central bank.

Kudlow made the forecast on the "Pod Force One" podcast hosted by New York Post columnist Miranda Devine, saying the president was "furious at Powell in the first term for jacking up [interest] rates for no particular reason." He said the president would use the opportunity to install new leadership and pursue a comprehensive review of monetary policy, regulation and staffing.

Kudlow, who served as director of the National Economic Council from April 2018 to January 2021 and now hosts a show on Fox Business Network, named two potential successors: former White House economic adviser Kevin Hassett and former Fed board member Kevin Warsh. "He is the chief executive and the commander in chief — he’s elected by the people," Kudlow said, arguing the president should not be blocked from making changes.

Kudlow also urged what he called a "top to bottom review" of the Fed covering monetary policy, regulatory policy, personnel and economic models. He claimed the Fed system had established numerous diversity, equity and inclusion offices across its regional banks and said outside voices should be brought in to refresh staffing and policy approaches.

Powell has served on the Fed’s Board of Governors since 2012 and became chair in 2018. His current term as chair runs through 2026. Trump and Powell have clashed publicly over interest-rate policy, with the president repeatedly urging cuts and at times suggesting he might remove the chair before the term ended; the president later walked back specific threats. After a late-July tour of the Fed’s Washington headquarters, Trump said he believed Powell would "do the right thing." Critics in the White House and among some lawmakers have also assailed a multiyear renovation of the Fed’s headquarters, which has been reported to cost roughly $2.5 billion.

Kudlow referenced growing unease among some economists about the Fed’s approach to policy. He said Mohamed El-Erian, a well-known economist who is not aligned with Trump, had recently called for Powell’s resignation, arguing that Powell’s changing policy stance had undermined the Fed’s credibility. "The longer he stays, the worse the independence argument gets, and the worse the Fed’s credibility gets," Kudlow quoted.

Any presidential effort to replace a Fed chair would require a formal nomination and Senate confirmation. The Fed is structured to operate with substantial independence from day-to-day political influence, a feature designed to insulate monetary policy decisions from electoral politics. Changes to personnel or policy direction on the scale Kudlow described would therefore involve both executive action and congressional scrutiny.

Markets monitor statements and signals about leadership at the Federal Reserve because the chair and the board set interest-rate policy and oversee the regulatory framework affecting banks and broader financial markets. Kudlow framed his remarks as a call for a comprehensive reassessment of the institution, saying new leadership should be willing to review models, staffing and policy priorities.

Kudlow made the comments as part of a broader discussion on the podcast about the administration’s economic agenda and approach to regulators. He reiterated his view that the president is justified in pressing for changes at the Fed and said those changes would be pursued when Powell departs in May.

The White House and representatives for the Federal Reserve did not immediately respond to requests for comment. Kudlow’s remarks add to an ongoing public debate about the balance between executive influence and central-bank independence as Washington, markets and policymakers watch developments at the Fed and across the U.S. economic policymaking architecture.