President Trump is making moves to replace Federal Reserve Chairman Jerome Powell sooner rather than later.
With less than a year left in Powell’s term, Trump is keen to find a replacement that aligns with his economic agenda.
This week, he mentioned he is evaluating “three or four” potential candidates, with the possibility of making an announcement before Powell’s term ends in May.
Among the leading candidates that have surfaced are five noteworthy options.
Perennial candidate: Kevin Warsh
Kevin Warsh has long pursued a role in economic leadership within the administration, and this could be his time to shine.
A former Morgan Stanley banker and economic advisor to George W. Bush, Warsh was the youngest member of the Federal Reserve Committee when he joined in 2006 at age 35. He served through the 2007-08 financial crisis and remained until 2011.
He was a strong contender to replace former Fed chair Janet Yellen in 2018, but ultimately lost out to Powell.
After the 2024 election, rumors circulated about Warsh being a candidate for Treasury Secretary, and he even met with Trump at Mar-a-Lago.
According to analysts at Beacon Policy Advisor, while Trump desires a Fed Chairman who is somewhat flexible, a candidate like Warsh could fit the bill. Warsh has been critical of Powell’s leadership, suggesting the Fed has been lacking accountability.
In his own words, “When the Fed is criticized, in my view, independence is being declared reflexively,” he stated during a speech in April.
Recently, he intensified his criticisms, labeling central bankers as “spoiled princes” and supporting Trump’s critique of the Fed.
Warsh’s political ties run deep; his father-in-law has made substantial donations to Trump, further intertwining their fates.
Market whispers: Treasury Secretary Scott Beuscher
Beuscher has quickly established himself as a key figure within Trump’s administration, becoming a go-to for Wall Street relations.
He was instrumental in urging Trump to adjust tariffs on Chinese goods, which ultimately calmed market tensions.
His successful negotiation efforts have made him a central part of Trump’s economic team.
Though he has been more reserved in his critiques of the Fed compared to some others, his loyalty to Trump and understanding of market demands keep him in discussion for the Fed position. However, replacing him might be complicated for the president.
Professor: Governor Christopher Waller
With years of experience as an economics professor and as director of Fed research, Waller joined the Fed Committee in 2020.
He has worked closely with Powell on interest rate matters but seems less concerned about the inflation impact from Trump’s tariffs. Recently, he even suggested a rate cut.
Waller has dismissed Trump’s frequent criticisms of the Fed, arguing that the president’s opinions shouldn’t dictate central bank independence.
His stance suggests he values free expression but maintains a distinct separation from political influence.
The Trailblazer: Vice Chair of Supervision Michelle Bowman
Bowman, who Trump appointed and was confirmed in 2018, has a background in community banking.
She initially served as Kansas’ banking supervisor and has made significant strides since her nomination as vice-chair earlier this year. Her new role will allow her to oversee many large banks.
While generally aligning with Powell until now, Bowman has recently called for urgent rate cuts, potentially positioning herself as a pivotal figure at the Fed.
If confirmed, she would be the second woman to chair the central bank, following Janet Yellen.
Eternal Optimist: Kevin Hassett
Having worn multiple economic hats in Trump’s administrations, Hassett is known for advocating the president’s agenda, even when faced with skepticism from the public.
As a former chairman of the White House Economic Council, he has engaged in crafting significant policy changes.
His optimistic outlook often helps balance advice to Trump, but he has sharpened his critiques of the Fed recently.
Hassett stated, “There’s no excuse other than partisanship to prevent the Fed from cutting interest rates,” reflecting his increasing frustration with how the Fed is being run.
He has notably expressed concern over the ongoing economic path, emphasizing the need for debt repayment while still addressing current market conditions.
