Trump to Name New Fed Chair as Bessent Declines Nomination and Markets Watch for Policy Shift

President Donald Trump is set to announce his nominee for the Federal Reserve Chair in the coming days, following the early resignation of Governor Adriana Kugler and a growing rift with current Chair Jerome Powell. This move marks a significant shift in the Trump administration’s approach to economic leadership and monetary policy. The decision comes as the administration seeks to reshape key economic institutions, aligning them more closely with Trump’s vision of aggressive rate cuts and expansive economic growth [1].

Kugler’s departure created a vacancy on the Federal Reserve’s Board of Governors, prompting Trump to accelerate his plans for a new appointment. In a statement, Trump confirmed he had considered Scott Bessent for the role but ruled him out after Bessent declined the nomination. "Well, I love Scott, but he wants to stay where he is," Trump said, adding that Bessent had "replied, 'Nope, I want to stay where I am.'" With Bessent now confirmed to remain as Treasury Secretary, Trump has narrowed the list of potential candidates to four, though none have been formally identified at this stage [3].

The anticipated change in Fed leadership has drawn close attention from financial markets. Trump has long advocated for lower interest rates, a stance that could influence the direction of monetary policy under a new chair. Analysts suggest that such a shift might affect U.S. bond yields and the value of the dollar, with broader implications for both traditional and digital financial assets. Cryptocurrencies such as Bitcoin and Ethereum could see increased volatility in response to the nomination and subsequent policy adjustments [5].

Trump’s decision also reflects ongoing tensions with Powell, who has maintained a cautious approach to rate policy, keeping the benchmark rate within the 4.25% to 4.5% range. Powell has emphasized the need to monitor the economic impact of Trump’s recent tariff policies, a stance that has reportedly frustrated the president. The appointment of a new Fed Chair could signal a more assertive push for rate reductions, potentially altering the trajectory of U.S. monetary policy in the coming months [7].

Investors and market participants are closely watching the developments, as Fed leadership changes historically correlate with periods of increased market volatility. The choice of the next Fed Chair will play a crucial role in shaping interest rate decisions, inflation management, and overall economic strategy. Analysts note that the direction taken by the new leadership could have far-reaching effects on both domestic and global financial markets, influencing investor sentiment and capital flows [8].

Sources:

[1] https://www.reuters.com/world/us/trump-will-announce-fed-appointments-soon-bessent-wants-stay-treasury-2025-08-05/

[2] https://www.cnbc.com/2025/08/04/trump-set-to-name-replacements-at-the-fed-and-bls-in-coming-days.html

[3] https://www.cnn.com/2025/08/05/business/scott-bessent-fed-chair

[4] https://www.bloomberg.com/news/articles/2025-08-05/trump-says-bessent-doesn-t-want-to-be-considered-for-fed-chair

[5] https://www.morningstar.com/news/marketwatch/2025080567/trump-narrows-fed-chair-list-bessent-is-out-while-these-two-rise-in-rankings

[6] https://www.foxbusiness.com/politics/trump-says-he-announce-candidate-open-fed-position-next-couple-days

[8] https://thehill.com/homenews/administration/5436230-trump-removes-bessent-fed-chair