On Tuesday, August 5th, United States President Trump revealed that Treasury Secretary Scott Bessent expressed his desire to continue in his current position and is not considering the role of Federal Reserve Chairman. President Trump is in the process of seeking a replacement for current Federal Reserve Chairman Jerome Powell, whose term is set to end in May 2026.
During an interview with CNBC on Tuesday morning, President Trump was asked about this matter and said, “I like Bessent, but he wants to stay in his current position.”
“He actually said, ‘I want to work with you.’ It’s truly an honor for me. I said, ‘That’s great, I appreciate it.'”
President Trump mentioned that he has narrowed down the potential candidates for the future Federal Reserve Chairman to four individuals. The candidates under consideration include former Federal Reserve Board Governor Kevin Warsh, White House Chief Economist Kevin Hassett, and two others.
President Trump stated that both Kevins are highly qualified and that the other candidates are also exceptional. Both Kevins support a rate cut.
Hassett mentioned on Monday that Bessent is assisting in leading Trump’s search for the Federal Reserve Chairman position. Bessent is seen as the frontrunner among external observers for the Federal Reserve Chairman position.
Federal Reserve Board Governor Adriana Kugler submitted her resignation last week, leaving four months remaining in her term. Each board member’s full term is 14 years. According to standard procedure, a president only has the authority to nominate two board members within a four-year term. The Federal Reserve Act stipulates that the terms of the seven board members need to be staggered every two years.
Trump sees Kugler’s early resignation as a significant “surprise,” meaning the President will have to promptly announce a nominee to fill Kugler’s vacancy.
“I will announce this news soon,” Trump said. “Her remaining term is only four months, you know, a very short time.”
However, this nominee is likely to be the next Federal Reserve Chairman. President Trump added that his chosen Federal Reserve Board members may ultimately become the picks for Federal Reserve Chairman once Powell’s term concludes.
Current Federal Reserve Chairman Powell has often been criticized by Trump because the President desires rate cuts to align with his economic policies. Speculation suggests that the President may appoint a “shadow chairman” to help weaken Powell’s authority before his term ends. Trump has not committed to this approach but acknowledges that “the possibility exists.”
Last week, the Federal Reserve voted to maintain the target range for the federal funds rate between 4.25% and 4.5%. The market expects the Federal Reserve to approve another rate cut in September. Between September and December 2024, the Federal Reserve lowered rates by a full percentage point. Trump questioned whether this action was politically motivated to assist Democratic presidential candidate Hillary Clinton.