In the latest photograph, Trump is seen sitting at a table with Secretary of State Rex Tillerson, Commerce Secretary Wilbur Ross, National Security Adviser HR McMaster, Chief of Staff Reince Preibus, special adviser and son-in-law Jared Kushner, and others.
According to former Trump advisers, Kushner is trying to steer the president towards more mainstream positions, while Bannon is bent on trying to maintain the nationalistic fervour that led to Trump's victory in the November election.
The former banking mogul walked with a $285 million severance package when he left Goldman Sachs to work in the Trump administration. But on Saturday, Axios reported that it looks like Bannon is the one who is most isolated.
Bannon, who joined Trump's presidential campaign after serving as chairman of Breitbart, was one of the forces behind the president's nationalist policies, including his denunciations of some USA military interventions.
Multiple White House officials said Bannon had threatened to resign over the effective demotion, a warning that sources said "stunned" the president.
Kushner and other aides anxious that Bannon's fixation on "deconstructing" government had not served Trump well in the first months of his presidency.
At his Florida resort in Mar-a-Lago this week, Trump reportedly brought together chief strategist Steve Bannon and son-in-law Jared Kushner to try and hash out rumored tensions. The session was "an attempt to smooth things over/get on the same page and move forward on President Trump's agenda", the official said.
Bannon originally served on the committee as a check against Michael Flynn before Flynn was ousted as National Security Advisor, a top White House official told NBC News.
Bannon, who was appointed to the council to guide and watch over then-national security adviser Michael Flynn, remains White House chief strategist. However, a White House official insisted Friday there are "no indications of a staff change".
Still, Chris Ruddy, a longtime Trump friend and the head of NewsMax, said Trump thrives on internal debate but does not like "when people are leaking or criticizing to the outside".
"No staff shakeups here", the official added.
Kupchan, now a senior fellow at the Council on Foreign Relations, a nonpartisan policy research group headquartered in NY, and also a professor of global affairs at Washington's Georgetown University, said McMaster's steadying influence was encouraging.
The Journal said Trump has spoken to some of the people close to him in recent days about the performance of Chief of Staff Reince Priebus and has asked for the names of possible replacements.
Already, reports indicate Bannon's power is waning.
By way of comparison, the former President Barack Obama's White House "rivaled his modern-day predecessors for the number of shake-ups in that post during in a single term".