Trump Aims to Name Pro-Dovish Fed Chair by Christmas, Sparking Independence Concerns

Trump to Name Next Fed Chair Before Christmas as Candidates Finalized

President Donald Trump has accelerated efforts to select a successor for Federal Reserve Chair Jerome Powell, signaling his intention to finalize the appointment before Christmas. The president, who has publicly criticized Powell for maintaining high interest rates, is narrowing a shortlist of candidates, with Treasury Secretary Scott Bessent leading the search. Trump hinted during a press briefing that he has already settled on a preferred nominee, though he declined to specify the name. "I think I already know my choice," Trump said on Nov. 19, adding that "people are holding me back" from immediately removing Powell according to reports.

The candidates under consideration include current Fed Governor Christopher Waller, former Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and BlackRock's Rick Rieder. Bessent, who has ruled himself out of the running, aims to submit recommendations by mid-December, with Trump set to meet the final three contenders before confirming a decision according to sources. The chosen nominee will replace Powell, whose term as chair expires in May 2026, though his role as a Fed governor extends through 2028 as reported.

The appointment carries significant implications for monetary policy. Trump has repeatedly called for rate cuts to lower borrowing costs and stimulate economic growth, a stance that aligns with several candidates' views. Treasury Secretary Bessent, for instance, has advocated for scaling back the Fed's market interventions, while former Fed Governor Kevin Warsh has long pushed for a smaller central bank balance sheet according to analysis. The new chair will need to balance Trump's economic priorities with maintaining the Fed's credibility and independence-a challenge highlighted by recent controversies.

A recent ethics scandal involving former Fed Governor Adriana Kugler, who resigned in August amid allegations of trading violations, has further complicated the process. Kugler's abrupt exit created an opening for Trump to install an ally on the board, with Stephen Miran-a Trump adviser-filling the vacancy. The incident has drawn bipartisan criticism, with lawmakers like Senator Elizabeth Warren calling for stricter Fed ethics reforms according to reporting.

Trump's push for a swift appointment has also raised legal and political questions. While the president has the authority to nominate a Fed chair, removing Powell prematurely would require congressional approval and could spark debates over the Fed's independence. Trump has previously floated the idea of firing Powell, though legal experts note that policy disagreements alone may not justify such a move according to experts.

Financial markets are closely watching the process, as the Fed's approach to interest rates and inflation targeting will shape economic conditions for years. A dovish chair, favoring lower rates, could boost equity markets and consumer spending, while a hawkish appointee might prioritize inflation control, potentially increasing borrowing costs for businesses and households as market analysis shows. The outcome will also influence global markets, as the Fed's policies ripple across trade, commodity prices, and currency valuations according to market insights.

With the White House aiming to finalize the decision before Christmas, the focus now shifts to how the chosen candidate will navigate Trump's agenda while preserving the Fed's institutional integrity. As Bessent and senior officials conduct final interviews, investors and policymakers await a confirmation that could redefine U.S. monetary policy in the coming years.

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