:max_bytes(150000):strip_icc()/GettyImages-2226032580-b10164ab8d5c4a879d4bafab8805d976.jpg "Trump Could Name A New Fed Chair By Christmas, Treasury Secretary Bessent Says")
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Key Takeaways
- Treasury Secretary Scott Bessent said President Donald Trump will likely name a new Fed chair by Christmas.
- Trump is nominating a replacement for Jerome Powell, whose four-year term leading the central bank expires in May.
- Trump has frequently clashed with Powell and criticized him for keeping interest rates too high.
It won’t be long before we know who is on deck to replace Federal Reserve Chair Jerome Powell.
There is a “very good chance” President Donald Trump will name Powell’s replacement before Christmas, Treasury Secretary Scott Bessent said Tuesday on CNBC. Powell’s four-year term as Fed chair expires in May.
How This Affects The Economy
Trump is getting closer to naming a new leader for the Federal Reserve, and has said he will name someone to the post who is willing to lower the fed funds rate.
Trump is considering five candidates to be the next top banker: Fed Governors Michelle Bowman and Christoper Waller, former Fed Governor Kevin Warsh, National Economic Council Director Kevin Hassett, and BlackRock director Rick Rieder, Bessent told reporters last month.
Trump has frequently criticized Powell for keeping interest rates too high and has threatened to fire him on multiple occasions. Earlier this month, Trump threatened to fire Bessent as well if he could not get Powell to cut rates. Trump was joking in those comments, Bessent said on CNBC.
Trump has said the next Fed chair will be someone willing to lower interest rates. The Fed’s 12-member Federal Open Market Committee votes on rates, but the chair sets the agenda and has a significant influence on the group’s monetary policy decisions.
The federal funds rate determines the interest rates at which banks lend money to one another, and influences borrowing costs on all kinds of loans. The Fed is charged with a “dual mandate” to keep inflation low and employment high, and keeps interest rates higher when it needs to push down inflation.
