Trump Administration Picks Five Contenders to Replace Fed Chair Powell
Treasury Secretary Scott Bessent on Monday confirmed the names of five candidates to replace Jerome Powell as chair of the influential Federal Reserve next year. During an Air Force One flight to Asia with President Donald Trump, Bessent stated that he would conduct a second round of interviews in the upcoming weeks and would present a strong slate of candidates to Trump immediately following Thanksgiving. Trump stated, “I expect to decide on Powell’s replacement by the end of this year.” The individuals being evaluated include Federal Reserve governors Christopher Waller and Michelle Bowman; former Fed governor Kevin Warsh, White House economic adviser Kevin Hassett, and Rick Rieder.
The names indicate that regardless of the selection, significant changes are anticipated at the Federal Reserve in the coming year. Bessent, who is spearheading the search for Powell’s successor, last month released comprehensive critiques of the Fed and various policies it has implemented since the Great Financial Crisis of 2008-2009 through to the pandemic. On Monday, Trump reiterated his persistent criticisms of Powell, asserting that he has been excessively slow in reducing interest rates. “We have a person that’s not at all smart right now,” Trump said, referring to Powell. “He ought to have been much lower, much sooner.” The Fed is anticipated to reduce its key rate on Wednesday, marking the second decrease this year. Trump’s aim to appoint a new chair by the year’s end may indicate the complex factors at play regarding Powell’s position. His term as chair concludes next May; however, he may continue to serve on the Fed’s board as one of seven governors until January 2028, a move that is unusual yet not entirely without precedent. This action would prevent Trump from having the chance to nominate another governor for a number of years.
Current governor Stephen Miran was appointed by Trump on September 16 to complete an unexpired term that concludes next January 31. Trump may nominate his candidate to fill Powell’s seat, subsequently promoting that individual to chair in May following Powell’s departure. Hassett serves as the chair of the National Economic Council at the White House and previously held the position of a key adviser to Trump during the president’s first term, often appearing on television to defend the administration’s policies. Some Fed watchers suggest that his longstanding loyalty to the president may provide him with an advantage. Warsh, a former economic advisor during the George W. Bush administration, was appointed to the Federal Reserve’s governing board in 2006 at the age of 35, earning the distinction of being the youngest Fed governor in history. He departed from the board in 2011 and currently holds a position as a fellow at the Hoover Institution and serves as a lecturer at the Stanford Graduate School of Business. Waller was appointed to the Fed by Trump in 2020 and swiftly emerged as an independent voice. He initiated calls for rate cuts in July and expressed dissent during that meeting, advocating for a quarter-point reduction, while the Fed opted to maintain its key rate as is. Michelle Bowman serves as the vice chair of supervision for the Federal Reserve, positioning her as the foremost banking regulator in the country.
Rieder possesses the most extensive experience in financial markets among the candidates and has been employed by Wall Street firms since 1987, joining BlackRock in 2009. Bessent has articulated a comprehensive critique of the Fed during the process of interviewing for Powell’s replacement, arguing the central bank persisted with unconventional policies such as Treasury bond purchases well beyond emergency conditions. “It is essential the Fed commit to scaling back its distortionary impact on markets,” he wrote. His critiques, aligned with Trump’s push for lower rates, have raised concerns about Fed independence, especially as Trump seeks to remove Fed governor Lisa Cook to open another seat. Cook has taken legal action and continues to serve as the Supreme Court deliberates. Some critics, including Wharton’s Peter Conti-Brown, warned against installing loyalists at the Fed, saying, “Those are the ones that we want as his advisers and spokespeople and his lawyers, not his central bankers.”
