Economist Larry Kudlow predicts President Donald Trump will make big moves at the Federal Reserve when Chairman Jerome Powell steps down.

What Happened: Kudlow, who served as Director of the National Economic Council from 2018 to 2021 under Trump, shared his view on the independence of the Federal Reserve and what Trump should do in the future.

Kudlow said Trump and Powell have been at odds with each other dating back to the president's first term.

"Trump was furious at Powell in the first term for jacking up rates for no particular reason," Kudlow said in a recent interview on the "Pod Force One" podcast from the New York Post.

With Trump calling for Powell to cut interest rates in recent months and suggesting he could fire the Federal Reserve chairman, Kudlow offered his prediction on what might happen.

"The bottom line is: President Trump's going to take the Fed over, as he should."

Powell's term ends in May 2026.

Trump has since walked back the threat to fire Powell and Kudlow doesn't think this "big move" is necessary. Kudlow believes that after Powell leaves, Trump should take over the Fed and conduct a review.

"You need a top-to-bottom review of the Fed – everything – monetary policy, regulatory policy, personnel policy, staffing policy, economic models policy. There has to be a thorough going, and you need somebody from the outside and then bring in new people."

Kudlow said people shouldn't stand in the way of the president, including judges, the Federal Trade Commission and the Federal Reserve. "He is the chief executive and the commander in chief – he's elected by the people.”

Read Also: Trump’s Billionaire Backer Turns Critic -- Ken Griffin Warns President’s Fed Meddling Won’t End Well

Powell Replacement: Kudlow was once considered a potential candidate for the role of Federal Reserve Chairman, but his odds on the prediction market Kalshi are under 1%.

"I felt the two Kevins were the best, Kevin Hassett and Kevin Warsh. They're both very dear friends of mine," Kudlow said when asked to pick Powell's replacement.

Hassett and Warsh rank second and third at 25% and 18% respectively in the prediction market odds on Kalshi. Christopher Waller is the frontrunner at odds of 31%.

Kudlow's name popped up in the conversation for the role last year after meeting with Trump at Mar-a-Lago. The current Fox Business analyst remains a close ally of the president.

Fox News said Kudlow has no plans to leave.

“Larry Kudlow recently signed a new deal to continue hosting his eponymous program on FOX Business and has no plans to leave his current role helming one of the highest-rated shows on the network," a Fox spokesperson previously told Benzinga.

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