On Oct. 27, Treasury Secretary Scott Bessent said President Donald Trump has narrowed his search to replace Federal Reserve Chairman Jerome Powell, whose term does not end until May 2026.
Powell, who has clashed with Trump over cutting interest rates amid the risk of rising inflation, has said he will serve out the remainder of his term. After his term as president ends, his term on the board of directors still extends until 2028.
Trump is expected to announce the replacement of the Federal Reserve chairman as early as December, according to reports.
“We’re down to five,” Bessent told reporters while traveling with Trump on Air Force One, according to Yahoo Finance. “We’re going to do a second round and hope to present a good list to the president right after Thanksgiving…Ultimately, it will be his choice.”
Bessent said those five picks are: Michelle Bowman and Christopher Waller, both members of the Federal Reserve board of governors; Kevin Hassett, director of the National Economic Council; Kevin Warsh, former governor of the Federal Reserve; and Rick Rieder, chief investment officer of global fixed income at BlackRock, according to multiple media outlets according to CNBC.
Trump’s pick must be confirmed by the Republican-controlled Senate. Like Powell, the new Federal Reserve chair will be tasked with navigating inflation, the country’s weakening labor market and stagnating growth. Fed members remain divided over whether the Trump administration’s economic policies, including high tariffs and push for even lower interest rates, are helping or hurting the US economy, CNN noted.
Powell first assumed the chair of the Federal Reserve in February 2018 and was re-elected to a second four-year term in May 2022. His term as a member of the Federal Reserve board of governors ends on January 31, 2028.
Last month, he explained the Fed’s dilemma when it comes to cutting or raising interest rates: whether to use them to combat inflation or instead help offset a struggling labor market (while keeping prices and unemployment in check).
“We only have one tool, which is monetary policy (actually, interest rates) and [the situation] “It’s asking for different answers,” Powell said. “It’s a very difficult political environment when your two goals tell you two different things, you have to make a compromise.”