As is well known, US President Donald Trump has been calling on Fed Chair Jerome Powell to cut interest rates and resign for some time. Powell stated that interest rate cuts should wait a little longer, while Trump stated that the time has come for interest rate cuts and that delaying them would harm the US economy.
As interest and resignation tensions continued between the two, Trump began to look for another candidate to replace Powell.
At this point, US Treasury Secretary Scott Bessent said that the process of selecting Fed Chair Powell’s successor has begun.
Speaking to Bloomberg’s Surveillance program, Scott Bessent said the official process has begun to identify Powell as a potential replacement for Federal Reserve Chair Jerome Powell.
The Treasury Secretary stated that the process will proceed at President Trump’s pace.
“The official process has begun. There are many great candidates and we will see how quickly the process moves.”
Bessent also noted that uncertainty surrounding Powell’s tenure could have a negative impact on markets and warned that Powell’s continued presence beyond his term could create confusion in the markets.
“Traditionally, the Fed chair also steps down from his or her position on the board. If he or she acts as a shadow Fed chair, it could create confusion. It would be very misleading for the market,” Bessent said.
Powell’s term as chairman expires in 2026, but her board membership continues until January 2028. This means she can continue to influence decision-making even after her chairmanship ends. However, Powell has consistently avoided any questions about her continued board membership.
*This is not investment advice.