US President Donald Trump is likely to reveal his nominee for the crucial position of Federal Reserve chair in the first days of January, according to a statement from Treasury Secretary Scott Bessent. The selection process has narrowed down, with National Economic Director Kevin Hassett and former Fed Governor Kevin Warsh emerging as the frontrunners for the role that will steer America's monetary policy.
The Final Stages of the Selection Process
In an interview with Fox Business on Tuesday, December 16, Bessent indicated that the final round of interviews is underway. He confirmed there are "one or two more interviews this week" before President Trump makes his final decision. Bessent described the president's approach as deliberate and direct, noting that Trump has been grilling candidates on their views regarding Fed policy, the central bank's structure, and the future path of the US economy.
This aligns with Trump's earlier comments in a Wall Street Journal interview, where he named Hassett and Warsh as his preferred choices. Bessent echoed the sentiment, calling both men "very, very qualified" for the prestigious post.
Trump's Push for Influence and the Candidates' Stance
The upcoming appointment is seen as a key move by President Trump to shape the direction of US interest rates, a topic of frequent public commentary from him. He has repeatedly expressed dissatisfaction with the pace of interest rate cuts under the current Fed Chair, Jerome Powell, whose term concludes in May. Trump has advocated for a more aggressive approach to lowering rates.
Following a meeting with Kevin Warsh on December 12, Trump emphasized his advisory role, telling the WSJ, "It doesn’t mean — I don’t think he should do exactly what we say. But certainly we’re — I’m a smart voice and should be listened to."
However, leading candidate Kevin Hassett, while welcoming dialogue, has stressed the fundamental independence of the Federal Reserve. Appearing on CBS's Face the Nation, Hassett clarified the boundaries, stating, "But in the end, the job of the Fed is to be independent." He added that while he would enjoy daily conversations with the president, Trump's opinions would hold "no formal weight" in monetary policy decisions unless they were data-driven.
Context of Recent Fed Actions and What's Next
The selection comes at a pivotal time. The Federal Reserve recently cut its benchmark interest rate to a range of 3.5% to 3.75% on December 10, marking the third consecutive reduction. However, the Federal Open Market Committee (FOMC) appears divided on the future course, with three officials dissenting from the latest cut.
President Trump's choice for the next Fed chair will undoubtedly set the tone for the central bank's policy in the coming years, especially as he seeks to leave a lasting imprint on the US economic landscape during his second term. The decision, expected in early January, is being closely watched by global financial markets.
