Fed Chair Shortlist Shrinks as Trump Considers Bold Moves

Economist Mark Zandi is warning that the U.S. economy is teetering on the edge of a recession. Last week’s economic data showed job growth sharply slowing and inflation ticking higher—two trends that complicate the Federal Reserve’s ability to step in. Zandi points to flat consumer spending, a decline in construction and manufacturing, and reduced hours worked as further signs of economic trouble. He also blames rising tariffs and strict immigration policies for weakening both household finances and corporate profits.

Switzerland is scrambling to reopen trade talks with the U.S. after President Trump imposed a steep 39% tariff on Swiss goods—one of the harshest under his new global trade policy. The tariffs hit luxury watchmakers like Rolex and Swatch, as well as exports like cheese and chocolate, while sparing pharmaceuticals for now. The move could severely impact Switzerland’s export-driven economy and may force its central bank to cut rates. Despite failed last-minute talks, Swiss officials remain hopeful that continued negotiations will ease tensions and lead to a better deal.

President Trump suggested he may impose new tariffs on China for purchasing oil from Russia, following a similar move that doubled tariffs on Indian goods. While no decision has been made, Trump said such action “may happen.” If enacted, this could further strain U.S.-China trade relations and potentially spark retaliation. A White House adviser, however, downplayed the likelihood, warning that additional tariffs could backfire by harming the U.S. economy. Talks between the U.S. and China continue, with hopes of a summit later this year—but tensions remain, especially around AI technology and strategic resources.

President Trump announced he will likely appoint a temporary Federal Reserve governor within days to fill the soon-to-be-vacant seat left by Adriana Kugler, whose term ends in January. This move would buy time for the administration to continue evaluating long-term candidates—especially for the crucial Fed Chair position, currently held by Jerome Powell. Trump’s team is weighing several Wall Street insiders for the temporary role and continues to consider “the two Kevins”—Kevin Warsh and Kevin Hassett—as potential successors to Powell, whose term expires in May 2026.

With a vacancy opening on the Federal Reserve’s board, the Trump administration is weighing its options to influence the central bank’s direction. Fed Governor Adriana Kugler is stepping down early, and the White House is reportedly considering a temporary appointment to fill the five remaining months of her term. President Trump, who has long criticized the Fed for keeping rates steady, is pushing for interest rate cuts to stimulate the slowing U.S. economy. The decision on Kugler’s replacement — and potentially Fed Chair Jerome Powell’s successor in 2026 — could shape the Fed’s policy path in a time of economic