WASHINGTON – U.S. President Donald Trump succeeds Jerome Powell as Fed chairman candidates now include his aide Kevin Hassett, former Fed Governor Kevin Warsh and current Fed Governor Christopher Waller.
Trump told White House reporters that the three were named finalists for the Fed, adding that he would also consider Scott Bessent, but the Treasury Secretary was not interested.
Bessent, who was with the president in the Oval Office, confirmed his lack of interest.
“I have four,” Trump said. “Now I’m talking about three. He (Bessent) told me: ‘I won’t leave’.”
The president has made it clear that he intends to install a Fed leader, more in line with his efforts to cut rates, making Powell “too late” to act on borrowing fees and hurting home buyers with higher mortgage rates.
Powell’s Fed held a hold throughout the year as Trump’s tariffs could reignite inflation, although his concerns have recently shifted to a position where the labor market slowed.
The Fed’s choice will carry high stakes for the financial market, which closely monitors the Fed’s leadership changes to understand clues to interest rates, inflation policy and central bank independence.
The Labor Department said Friday that job growth in the U.S. weakened sharply in August, with unemployment rising to a 4.3% high in nearly four years.
Powell pointed out last month that downside risks in the labor market “may require” careful policy adjustments, noting that financial markets and analysts believe he may support a cut of a quarter-point interest rate in September.
This is far less than the cuts Trump has requested.
National Economic Commission Director Hassett has been a reliable advocate for Trump’s tariffs and other policies and agreed with Trump’s agreement that the Fed’s interest rates are inappropriate.
Warsh has repeatedly called on the Fed to carry out “government changes.”
Waller runs the St. Louis Fed’s Research Department before Trump elected him as the federal government in 2020, which would be the draft pick for the institutionalists.
Bessent issued a series of criticisms of the Fed on Friday and called for a comprehensive review of central bank operations, from staffing to monetary policy. – Reuters
