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- Trump shortlists Kevin Warsh and Kevin Hassett as top contenders for Fed chair role.
- Calls grow for lower interest rates and closer White House–Fed coordination.
- Fed rate cut exposes internal divisions as Powell’s term nears its end.
President Donald Trump has narrowed his search for the next chair of the Federal Reserve as Jerome Powell’s term moves closer to its scheduled end. He confirmed that two candidates now lead the race. Trump named former Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett as his top options. He said Warsh currently sits at the top of his list.
Trump shared his views in an interview with The Wall Street Journal. He said both candidates bring strong policy experience and economic training. He also noted that a few other names remain under consideration. Still, his comments marked the clearest signal yet of his preferred direction. Markets reacted quickly to the remarks due to the Fed’s influence on rates and liquidity.
According to Trump, he met Warsh at the White House earlier this week. The meeting focused heavily on interest rate policy. Trump said he asked Warsh whether he would support rate cuts if confirmed. He said Warsh believes rates should move lower. Trump added that most of his advisers agree with that view.
Trump Calls for Closer White House Role in Fed Rate Decisions
Trump raised concerns about the Federal Reserve’s distance from the White House. He said the next Fed chair should consult the president on rate decisions. He argued that this approach was common in earlier decades. Trump said the practice faded over time. He described himself as an informed participant in monetary policy debates.
The remarks came after the Federal Reserve reduced interest rates recently. The benchmark rate was decreased by 25 basis points by the central bank. The new target range has risen to between 3.5% and 3.75%. It is the lowest in three years. The ruling highlighted the growing divisions within the central bank.
Three officials voted against the reduction of the rate. Two officials opposed any rate cut and expressed concerns about potential inflation. One supported a larger cut. That official, Stephen Miran, served as Trump’s adviser. The divide represented the highest number of disagreeing votes in years, surpassing those since 2019. Analysts attributed the vote to increasing internal disagreement.
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Trump also reinstated his ruling to appoint Jerome Powell in 2017. He regretted taking advice that contributed to the appointment of Powell, he said. Trump declared that he has already chosen a candidate of preference. Nonetheless, he emphasized that it is not the end of the process. He added that he does not want to repeat his mistakes.
Treasury Secretary Joins Final Stage of Fed Chair Selection
The last series of interviews is currently being held. Secretary of Treasury Scott Bessent is assisting in filtering out the list. Bessent has discussed two current Fed governors. These are Christopher Waller and Michelle Bowman. They were both chosen during the first term of Trump.
Trump mentioned that he is still happy with the officials he put on the Fed Board. He said that he honors their judgment and experience. Nevertheless, he indicated a willingness to change at the top. The position of the Fed chair is highly influential in the market and the policy of the world.
Kevin Hassett is still a contender. He has collaborated with Trump over the years. Hassett was a senior economic advisor between 2017 and 2019. He went back during the pandemic and currently heads the National Economic Council. He is an economist with a doctorate.
Hassett recently spoke of speculation over his chances. He underestimated the odds of the betting market. He explained that Trump is prone to change his mind before decisions are final. According to analysts, Trump has hinted at interest rates of about 1% or even less. Such a move would represent a drastic departure from the Fed policy.
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