Process for New Federal Reserve Chair Begins
Treasury Secretary Scott Bescent stated on Tuesday that the selection process for a new Federal Reserve chair is underway, as Chairman Jerome Powell’s term is set to end in 2026. This development seems to put additional pressure on Powell from the White House.
Bescent mentioned, “There’s a formal process that’s already begun,” highlighting the steps that are being taken to identify potential candidates for the Fed Chair.
He emphasized that there are “many good candidates both inside and outside the Federal Reserve.”
When it was brought up whether President Trump had asked him to be considered for the Fed Chairman position, he noted that he was involved in the decision-making process.
“It’s President Trump’s decision, and it’s going to move at his speed,” Bescent added.
Bescent, having established himself as a prominent dealmaker and advocate for Wall Street through tariff policies, is seen as a possible successor to Powell. While experts note there’s no legislation that bars the Treasury Secretary from taking the helm of the Fed, such a dual role might challenge the independence that is traditionally associated with the central bank.
Powell’s term as chairman ends in May 2026, yet he remains a Fed governor until 2028.
According to Bescent, “Traditionally, the Fed chair also resigned as governor.” He mentioned the confusion surrounding the current situation and expressed uncertainty regarding the possibility of the former Fed chair remaining in place.
Trump has urged Powell to resign, while Federal Housing and Finance Agency (FHFA) Director Bill Prute has called on Congress to investigate Powell for his previous remarks. The White House’s budget chief, Flussel, accused Powell of mismanagement concerning the central bank’s budget.
Trump has consistently criticized Powell, referring to him as “too late” and “Numbskull,” and has openly disapproved of decisions made by the central bank, particularly regarding stabilizing interest rates despite a slight cooling of inflation.
In defense of the Fed’s decision not to lower interest rates, Powell indicated that the central bank is awaiting the outcomes of the president’s trade policies and tax cuts on the strong U.S. economy.
