Trump narrows Fed chair list to four rate-cut advocates

Trump has narrowed his list of candidates for the next Federal Reserve Chair to four individuals, all of whom have close ties to his economic agenda and have consistently advocated for lower interest rates. The final shortlist includes Kevin Warsh, a former Fed Governor; Kevin Hassett, a senior economic advisor in the Trump administration; Christopher Waller, a current Fed official known for his monetary policy expertise; and Michelle Bowman, another sitting Fed Governor. These selections underscore Trump’s preference for a Fed leadership that aligns with his calls for more aggressive and timely rate cuts [1].

The announcement came after Trump ruled out Treasury Secretary Scott Bessent as a contender, confirming in a live CNBC interview that Bessent had declined the position. “I love Scott, but he wants to stay where he is,” Trump said, noting he had only asked the question the night before. Bessent, a close ally and advocate for rate reductions, had previously emphasized that the Treasury Secretary role was “the best job in Washington” and expressed no interest in stepping down [1].

With Bessent out of the running, the focus now shifts to the remaining four candidates. Warsh and Hassett bring significant experience in economic and monetary policy, both having held prominent roles in Trump’s administration. Waller and Bowman, as current Fed officials, offer institutional knowledge and have previously dissented from the majority stance in recent rate decisions. This combination of loyalty and expertise suggests a deliberate effort to reshape the Fed’s direction while maintaining stability within the central bank [1].

Adriana Kugler’s recent resignation from the Fed board created an immediate vacancy, providing Trump with an opportunity to make a swift appointment. Both Warsh and Hassett have publicly criticized the Fed’s current approach to monetary policy and have pushed for earlier and more substantial rate reductions. Waller and Bowman, meanwhile, have shown a willingness to challenge the status quo within the Fed, making them appealing choices for an administration seeking a more active role in shaping economic outcomes [1].

Jerome Powell, the current Fed Chair, remains in office until May 2026. While Trump has previously criticized Powell for delaying rate cuts, he has not confirmed any plans to remove him before his term ends. In response to questions about this possibility, Trump merely stated, “It’s a possibility,” but has recently indicated he will not act without legal justification. This shift appears to reflect pressure from financial leaders, including JPMorgan CEO Jamie Dimon, who has warned against undermining the Fed’s independence [1].

Prediction market odds have also shifted following Trump’s public comments. Kevin Hassett and Kevin Warsh now each have a 35% chance of being selected as the next Fed Chair, while Christopher Waller’s odds have dropped to 15%. Judy Shelton, a former Trump economic advisor, has a 6% chance, and David Malpass, a former World Bank president, holds a 4% probability. Even Trump himself has received a 1% chance of being appointed to the position, a figure that reflects his past joking remarks about his ability to lead the Fed [1].

Trump’s public engagement with the Fed, including recent visits to the central bank’s construction site with Powell, highlights the administration’s interest in expanding its influence over the institution. While the Fed remains legally independent in setting monetary policy, the visible presence of the White House in these discussions signals a growing desire to align the central bank’s decisions with broader political objectives [1].

The choice of the next Fed Chair will have far-reaching implications for U.S. monetary policy and global financial markets. The final decision is expected to reflect a balance between institutional knowledge and policy alignment with the administration’s economic goals, particularly in an environment where interest rate decisions continue to play a central role in shaping economic outcomes [1].

Source: [1] Who Will Replace Jerome Powell? Trump Says Not Scott Bessent (https://fortune.com/2025/08/05/who-will-replace-jerome-powell-trump-says-not-scott-bessent/)