US Treasury Secretary Scott Bessent has confirmed that the shortlist to replace Jerome Powell as chair of the Federal Reserve has been narrowed down to five candidates.
Speaking to reporters aboard Air Force One on Sunday, Mr Bessent said he expects to conduct one more round of interviews before presenting a list to President Donald Trump next month.
“We’re going to do a second round and we hope to present a good slate to the President right after Thanksgiving,” Mr Bessent said. Mr Trump said he intends to make a decision on Mr Powell's replacement by the end of the year.
“We have a person who is not at all smart right now,” Mr Trump said, repeating his criticism of Mr Powell, whom he has repeatedly attacked over his refusal to enact steep interest rate cuts.
It is expected the Fed chair candidate will be nominated for the Fed governor's seat currently occupied by Stephen Miran, a White House economic adviser who is filling the seat in a temporary capacity through January.
Mr Powell's term as Fed chair ends in May 2026. His term as a governor on the Federal Reserve Board runs through January 31, 2028. He has not offered any hints on whether he will remain on the board past his term as Fed chair.
Mr Trump has been trying to exert greater control over the Fed this year with repeated calls to deliver large rate cuts. The Fed, which has thus far defied those calls, is widely expected to cut US rates by 25 basis points at the conclusion of its two-day meeting on Wednesday.
Here are the five candidates on the shortlist:
Michelle Bowman
Fed Governor Michelle Bowman was first appointed to the Federal Reserve Board by Mr Trump in 2018 and was elevated to vice chair for supervision in June. Ms Bowman is considered to be one of the more hawkish officials on the current Fed board, although she dissented against the Federal Open Market Committee's decision to hold rates steady in July, arguing in favour of a 25 basis point cut at the time owing to underlying weakness in the jobs market.
Ms Bowman was also critical of the Fed's previous bank capital requirements – known as Basel III – before she was named the board's top regulatory official. Ms Bowman said in September that the Fed and other bank regulators are expected to pitch a new version of the rules that is expected to be more responsive to industry concerns.
Kevin Hassett
Kevin Hassett, director of the National Economic Council, is a top economic ally of Mr Trump. This is the second time Mr Hassett has served in the Trump administration, having first joined in 2018 as chair of the Council of Economic Advisors before leaving the post in 2019. He returned to the White House in 2020 to advise Mr Trump on economic policy during the Covid-19 pandemic. Mr Hassett also served on the White House's economics team as part of the Abraham Accords.
Between serving in the first and second Trump administrations, Mr Hassett joined the private equity firm Affinity Partners, founded by Jared Kushner, Mr Trump's son-in-law.
Rick Rieder
Rick Rieder is BlackRock's chief financial officer of global fixed income. Speaking to CNBC in August, Mr Rieder said the US economy has convinced him that this is the “best investment environment ever”.
Christopher Waller
Christopher Waller, another Trump appointee to the Fed board, is currently serving a term that is due to expire on January 31, 2030. Mr Waller has been one of the leading voices on the Fed board to cut interest rates this year, joining Ms Bowman in the July dissent. However, he voted in line with Mr Powell to cut rates by 25 basis points in September. And while he is pushing for a 25 basis point cut this week, he expressed caution on the pace of future cuts moving forward, drawing a contrast to Mr Trump.
“What I would want to avoid is rekindling inflationary pressure by moving too quickly and squandering the significant progress we have made taming inflation,” he said in a recent speech.
Kevin Warsh
Former Fed governor Kevin Warsh is also in the mix after being reportedly passed over for the treasury secretary position in Mr Trump's cabinet. Mr Warsh was former Fed chair Ben Bernanke's liaison between Washington and New York during the global financial crisis. While serving in that role, Mr Warsh helped to enable the sale of Bear Stearns to JPMorgan Chase but also allowed the collapse of Lehman Brothers, one of the most significant moments during the 2007-08 financial crisis.
He has also emerged as a critic of Mr Powell and the current Fed board, arguing the US central bank has strayed from its remit and blaming it for mistakes that allowed for the post-Covid inflationary surge. Mr Warsh served in former president George W Bush's administration and also previously worked at Morgan Stanley.
