Bessent Says Powell Will Leave FED Board in May 2026: In a comprehensive interview, US Trade Secretary Bessent addressed key economic and trade issues—from the Federal Reserve’s inflation outlook and speculation around Chair Jerome Powell’s future to Nvidia’s resumed GPU exports to China. He explained how export control policies were used as leverage in ongoing US-China negotiations and clarified the administration’s stance on global tariffs, especially the 30% rate proposed for European imports. Bessent also highlighted President Trump’s long-term vision for fair trade deals, dismissed market-driven decision-making, and confirmed early steps in the Fed chair selection process.
Powell Will Leave FED Board in May 2026?
In a Recent discussion on the recent string of softer-than-expected inflation prints in the United States, now marking a potential fifth consecutive subdued reading. The trade secretary, Bessent, acknowledged the persistence in the trend, suggesting that while individual inflation prints shouldn’t be overemphasized, the broader trend matters. He noted that the early consensus among economists and Wall Street about tariffs causing sustained inflation turned out to be incorrect, emphasizing that such forecasts overestimated the long-term inflationary impact of tariffs.
Addressing speculation around potential leadership changes at the Federal Reserve, Secretary Bessent reaffirmed that President Trump has stated multiple times that he has no intention of firing current Fed Chair Powell. While there has been consistent frustration from the White House regarding the Fed’s decisions, Bessent humorously likened the president’s strategy to basketball coaching—comparing Trump’s approach to the aggressive Bobby Knight method as opposed to the calmer Dean Smith model.
When asked about recent comments from National Economic Council Director Kevin Hassett, suggesting the possibility of Powell’s removal was being looked into, Bessent downplayed the remark while reiterating the administration’s respect for the independence of the Federal Reserve. He underlined the importance of maintaining the credibility and stability of financial markets through that independence.
On the topic of Powell tenure, which ends in May next year, Bessent suggested that the formal interview process to replace the Fed Chair Powell had already begun. He added that there are many qualified candidates both inside and outside the Federal Reserve system to replace powell and the process would move at President Trump’s discretion. On whether Powell had expressed intentions to remain a governor after his chairmanship ends, Bessent noted it would be unusual and potentially disruptive, stating that most Fed chairs step down entirely after their term.
Nvidia and Semiconductor Policy Shift
The discussion shifted to Nvidia’s H20 GPU sales to China. Bessent acknowledged recent developments in which Nvidia had informed customers that it resumed licensing processes and expected to start deliveries soon. The secretary confirmed this development, explaining that Nvidia’s renewed access to the Chinese market was a result of evolving trade negotiations.
He noted that certain Chinese companies, including Huawei, have developed equivalent semiconductor capabilities, and thus the restrictions on Nvidia might no longer serve their intended strategic purpose. Importantly, Bessent hinted that these changes were not random but instead formed part of a larger negotiating mosaic between the US and China—spanning Geneva and London trade talks.
He clarified that although the export controls imposed earlier in April were stringent, they also functioned as negotiating leverage. The current thaw on Nvidia’s restrictions seems to be part of a broader quid pro quo arrangement between Washington and Beijing, though Bessent carefully avoided directly calling it so. The objective, he stressed, was to avoid the emergence of a “digital Belt and Road” led by China and to protect American chip dominance globally.
He also mentioned that further dialogue is expected with Chinese counterparts in the coming weeks, with a potential meeting with the Chinese Vice Premier being planned around the leadership conclave in early August.
Europe Tariffs and Ongoing Trade Talks
On the European front, Bessent discussed the controversial 30% tariff rate being floated by the Trump administration. While downplaying the finality of those numbers, he indicated that they serve as a strategic ceiling unless European negotiators come forward with better trade deals. He reiterated that President Trump’s negotiating strategy relies heavily on maximum pressure—stating that the president’s ability to create leverage stems from his willingness to impose such tariffs if deals are not satisfactory.
Responding to questions about potential market backlash from such hardline tactics, Bessent said the markets remain calm and are looking ahead at the long-term economic benefits. He dismissed the narrative that market volatility alone would alter the president’s strategies, emphasizing that Trump views current trade reform efforts as a “generational opportunity” to reshape global trade in a manner that benefits American workers and businesses.
When asked directly whether higher tariffs beyond the April 2nd chart were still on the table, Bessent clarified that if trade talks proceed in good faith, those figures act as ceilings. However, he warned that if partners drag their feet, harsher measures could return. He praised the United Kingdom for securing a favorable deal by moving early and expressed disappointment at the slow pace of other countries.
Upcoming Japan Visit and Role Speculation
Regarding Japan, Bessent clarified that his upcoming trip to the country is not primarily about trade talks but rather to represent the US at the international expo, formerly known as the World’s Fair. While some had speculated that a trade deal might emerge from the visit, Bessent positioned the trip as largely ceremonial, focusing on “America’s Day” at the expo. He will be joined by a US delegation that includes the Deputy Secretary of State and the Secretary of Labor.
As the interview neared its end, Bessent was asked—somewhat cheekily—whether he might be considered for a dual role as Treasury Secretary and Federal Reserve Chair. Drawing a parallel with “player-managers” in 1990s English football, the interviewer questioned if Bessent would be interested in serving both posts. The secretary laughed off the suggestion, saying he has the “best job in town” and would follow President Trump’s guidance in any matter. While confirming that he is part of the Fed chair selection process, Bessent declined to comment further on whether he is under consideration himself.