The three individuals were the front-runners for Fed nominations, Trump told reporters at the White House. He said he would also consider Scott Bessent, but the Treasury secretary was not interested.
Former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, and Trump’s counselor Kevin Hassett are now on the shortlist of contenders to replace Jerome Powell as Fed head.
Trump Narrows Fed Chair List
The three individuals were the front-runners for Fed nominations, Trump told reporters at the White House. He said he would also consider Scott Bessent, but the Treasury secretary was not interested.
Bessent, who was present with the president in the Oval Office, confirmed that he was not interested. Trump remarked, “I had four candidates. Now I am considering three. He (Bessent) made it clear he isn’t going anywhere.”
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Fed Leadership for Agenda
By berating Powell for being “too late” to move on borrowing costs and for harming house buyers with higher mortgage rates, the president has made it obvious that he plans to replace Powell with a Fed chief more in line with his drive for swift interest-rate decreases.
Although Powell’s worries have lately changed to focus more on the deteriorating labor market, the Fed has held rates steady throughout the year because of fear that Trump’s tariffs may spark inflation again.
🏦 Fed Chair & Labor Market
- Front-runners: Warsh, Waller, Hassett
- Bessent: Declines interest
- Trump’s Goal: Fed aligned with faster rate cuts
- Powell: Likely supports 25 bps cut in Sept
- Labor Market: Job growth slows; unemployment 4.3%
- Markets Watch: Fed leadership could influence rates, inflation policy
- Hassett: Supports tariffs; favors lower rates
- Waller: Institutionalist; ex-St. Louis Fed research head
- Bessent’s View: Calls for full Fed review (policy, research, personnel)
- Powell vs Trump: Trump criticized “too late” rate moves
Financial markets, which constantly monitor changes in Fed leadership for hints about the path of interest rates, inflation policy, and the independence of the central bank, will be watching the Fed chair selection with great interest.
Labor Market Signals Pause
On Friday, the Labor Department reported that U.S. job growth slowed sharply in August, while the unemployment rate climbed to 4.3%, its highest level in nearly four years, signaling a cooling in the labor market.
Powell is probably in favor of lowering interest rates in September.
Financial markets and analysts saw Powell’s comments last month, which referenced labor market downside concerns that “may necessitate” a cautious policy adjustment, as indicating that he would probably back a quarter-point interest-rate decrease in September.
Fed Leadership Faces Scrutiny
That falls far short of Trump’s demands for reduction of several percentage points.
As a consistent supporter of Trump’s tariffs and other initiatives, Hassett, the head of the National Economic Council, concurs with Trump that the Fed has maintained unnecessarily high interest rates.
Waller, in charge of the research department of the St. Louis Fed prior to Trump appointing him as Fed governor in 2020, would be considered an institutionalist choice.
Bessent demanded a thorough examination of the Fed’s operations, including personnel, research, and monetary policy, in a flurry of criticism he issued on Friday.