Trump's chosen Federal Reserve appointees, according to Bessent, are expected to shift the conversation around monetary policy's future trajectory
The race for the Federal Reserve Chair position is heating up, with U.S. Treasury Secretary Scott Bessent revealing Fed Governor Christopher Waller as the current top contender. Bessent has identified 11 very strong candidates and will shortlist 3-4 finalists for President Trump to consider after conducting interviews starting after Labor Day 2025.
Among the other leading candidates being interviewed by Bessent are Fed Vice Chair Michelle Bowman, Fed Board Member Philip Jefferson, Dallas Fed President Lorie Logan, and Trump economic adviser Kevin Hassett. The final recommendation will be made this fall, ahead of Jerome Powell’s term ending in May 2026.
Bessent has emphasized the importance of selecting a chair who realigns the Fed with its core monetary mission amid economic uncertainties. He is considering candidates for the Federal Reserve Board of Governors based on their views on monetary policy, regulatory policy, and their ability to run and revamp the organization.
Meanwhile, President Donald Trump is applying pressure on Jerome Powell, the current Fed chair, to lower interest rates. Trump has threatened to allow a lawsuit over the Federal Reserve's $3.1 billion renovation project to move forward if Powell does not comply with his demands. In a post on Truth Social, Trump wrote, "Jerome 'Too Late' Powell must NOW lower the rate."
Markets are currently betting that the Fed will cut rates in September after a disappointing jobs report. The upcoming appointments to the Federal Reserve Board will change the composition of the Fed and the narrative, according to Bessent.
It's unclear if these events are related, as no prior context was provided. However, if Stephen Miran is appointed, it could make Jerome Powell a lame duck as Fed chair, according to Kudlow. No specific nominee for the Fed's Board of Governors has been mentioned in this regard.
Inflation remains steady at 2.7% in July, despite Trump's repeated demands for the Fed to adjust rates. Bessent mentioned that the organization has become bloated, which he believes puts its monetary independence at risk. Scott Bessent stated that Trump has an open mind regarding who will lead the central bank.
Sources:
- CNN
- Bloomberg
- Reuters
- Wall Street Journal
- Fox Business
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