Treasury Secretary Scott Bescent expressed his willingness to consider stepping in as Federal Reserve Chairman Jerome Powell’s replacement, as President Trump is eager to initiate changes within the central bank. When asked if he was seeking that role, Bescent mentioned he would align with the president’s decisions but appeared content in his current role.
Various names have surfaced in discussions about Powell’s potential successors, including Fed Governor Christopher Waller, Vice-Chair Michelle Bowman, Kevin Hassett from the National Economic Council, and former Fed Governor Kevin Wahsh.
While Powell’s term as chair will conclude next May, his role on the board lasts until 2028. Tensions between Powell and Trump have been rising, especially as Trump pushes for interest rate cuts amid growing inflation concerns that central bankers are wary about.
Economic forecasts reflect Trump’s escalating concerns regarding inflation, which rose from 2.3% annually in April to 2.4% in May. Powell has indicated a desire to accurately assess who absorbs tariff-related costs before considering adjustments in rates, noting that costs can be borne by manufacturers, importers, or passed on to consumers, thereby potentially raising prices. The Fed is maintaining high interest rates as a safeguard against such outcomes.
Trump, in favor of reduced borrowing costs, has been vocal on social media, recently advocating for a reduction of 2-3 percentage points in interest rates, claiming that such a move could save the US $800 billion annually.
The president’s frustration with Powell has lessened compared to earlier this year when he publicly called for Powell’s removal. In April, Trump tweeted, “Powell’s ending can’t come quickly enough!”
Since then, stock markets have shown some recovery following losses tied to Trump’s trade policies, with the Standard and Poor’s 500 index reaching new highs last week and continuing its upward trend amidst prospects of a new trade agreement between the US and China.
Currently, China’s tariff levels are estimated to be around 55%, inclusive of duties from Trump’s first term, while the overall US tariff rate is reported at 14.1%, according to Fitch ratings.
Bescent mentioned on Monday that he anticipates upcoming trade agreements, particularly with the “Key 18” countries before the July 9 deadline. He noted, “As pressure rises, there will be gusts of wind in the final week,” emphasizing the surprise at the competitive offers being presented by various nations.
