President Donald Trump may announce his nominee for the next chair of the Federal Reserve before the end of the year. Treasury Secretary Scott Bessent indicated that a decision could be made by Christmas, as speculation grows around the potential candidates to succeed current Fed Chair Jerome Powell.
Bessent stated, “I think there’s a very good chance that the president will make an announcement before Christmas.” While he acknowledged that the timeline ultimately rests with Trump, he expressed optimism about the progress of the selection process. Bessent emphasized the need for a less prominent central bank, stating, “I think it’s time for the Fed just to move back into the background, like it used to do, calm things down and work for the American people.”
Powell’s term is set to expire in May 2024, but the White House is actively pursuing his replacement. Prediction markets currently favor Christopher Waller, a Federal Reserve Governor, as the leading candidate. Waller recently mentioned a positive conversation with Bessent regarding the nomination process, expressing hope that the administration seeks a candidate with substantial experience.
Bessent’s assertions that the administration is looking for someone with “merit, experience, and knows what they are doing in the job” suggest a desire for a candidate who can navigate the complexities of the financial landscape. Among the reported finalists, only three have previous experience on the central bank, which underscores the importance of this selection.
Waller has gained traction in the prediction markets, recently overtaking White House economic advisor Kevin Hassett. Waller’s previous nomination to the Fed in 2019 was contentious, as he faced opposition due to his association with Judy Shelton, a Fed critic. In December 2020, Waller was confirmed by the Senate with a narrow 48-47 vote, the tightest margin for any Fed governor since 1980.
Hassett, who served as director of the Council of Economic Advisors during Trump’s first term, has seen his position diminish in prediction markets. His earlier lead has been challenged by Waller’s rising popularity. Hassett has a history of advising Republican candidates on economic policies but faced scrutiny during the COVID-19 pandemic for controversial predictions.
Another contender, Kevin Warsh, was previously considered for the Fed chair position during Trump’s first term. Having served at the Fed from 2006 to 2011, Warsh has been vocal in his criticism of Powell’s leadership. He called for “regime change” at the Fed, reflecting a desire for a shift in monetary policy direction.
Michelle Bowman, who was appointed to the Fed by Trump in 2018, is another potential nominee. She has made headlines recently for dissenting votes on interest rate decisions, highlighting her independent stance within the board. Bowman’s background includes roles in both government and banking, which adds to her qualifications for the position.
Rick Rieder, chief investment officer at BlackRock, rounds out the list of prominent candidates. With decades of experience on Wall Street, Rieder manages approximately $2.4 trillion in assets and has advised the Fed in various capacities. His extensive financial background positions him as a strong contender for the role.
Several names previously reported to be in the running, including Jefferies’ David Zervos, Dallas Fed President Lorie Logan, and former St. Louis Fed President James Bullard, are no longer under consideration. Reports indicate that Trump’s shortlist originally included almost a dozen candidates, reflecting a broad search for the right individual to lead the central bank.
As the countdown to Christmas begins, all eyes will be on the White House to see who Trump ultimately selects for this pivotal role. The decision will have significant implications for U.S. monetary policy and the broader economy as the nation navigates through ongoing challenges.
