Bessent says Trump's pick for the next Fed chair could happen next week

• The selection process began in September with 11 candidates, now narrowed to four finalists including National Economic Council director Kevin Hassett, former Fed Governor Kevin Warsh, current Governors Christopher Waller and Michelle Bowman, and BlackRock's Rick Rieder
• Bessent criticized Powell's leadership, noting that 4 to 6 Fed governors and presidents out of 19 total have resigned for ethical issues during his tenure, stating 'If that happened at a Wall Street firm, the CEO would be out'
• Trump and administration officials have repeatedly criticized Powell on both monetary policy decisions and institutional management, including recent controversies over Fed headquarters renovation

Summary: Trump's Federal Reserve Chair Nomination Expected Next Week

Key Development:

Treasury Secretary Scott Bessent announced President Trump could nominate the next Federal Reserve chair as soon as next week, concluding months of speculation. The selection process, which began in September with 11 candidates, has been narrowed to four finalists who have all personally met with Trump.

Leading Candidates:

While Bessent did not name the four finalists, reports indicate five potential nominees:

• Kevin Hassett (National Economic Council Director)
• Kevin Warsh (former Fed Governor)
• Christopher Waller (current Fed Governor)
• Michelle Bowman (current Fed Governor)
• Rick Rieder (BlackRock's chief fixed income strategist)

Prediction markets currently favor Warsh as front-runner, followed by Rieder and Waller, after Trump indicated preference for keeping Hassett in his current position.

Political Context:

Bessent, speaking at the World Economic Forum in Davos, emphasized that Fed independence "does not mean lack of accountability." The Trump administration has criticized current Chair Jerome Powell's monetary policy decisions and institutional management, particularly highlighting that 4-6 out of 19 Fed governors and presidents have resigned over ethical issues during Powell's tenure.

Timeline:

Powell's chair term expires in May 2026, though he has the option to remain as a Fed governor through 2028. Trump originally nominated Powell in 2017, and President Biden reappointed him.

Market Implications:

The imminent nomination signals potential policy shifts at the Federal Reserve, particularly regarding monetary policy approach and institutional governance, with the new chair likely reflecting the administration's economic priorities.