Dollar falls to 3-year low as Trump eyes early Fed Chair replacement

The US dollar dropped to its lowest point in three years after reports emerged that President Donald Trump may soon announce a replacement for Federal Reserve Chair Jerome Powell.

Trump has long criticized Powell for resisting interest rate cuts, calling him “very dumb” and “not a smart person.” The Fed Chair’s term ends in May 2026, but Trump may name a successor as early as September or October, according to The Wall Street Journal.

Markets reacted swiftly to the news, pushing the US dollar down 0.5% against a basket of major currencies—its weakest since March 2022. 

Trump’s potential early pick could influence market expectations on interest rates, undermining Powell’s authority.

Speaking at the NATO summit this week, Trump said he had narrowed his choice to “three or four people,” reportedly including Kevin Warsh, Kevin Hassett, and Treasury Secretary Scott Bessent.

The Fed emphasized that it bases its decisions on economic data, not political pressure.