The race to appoint the next chair of the U.S. Federal Reserve has entered its final stage, with President Donald Trump preparing to interview the remaining candidates this week. The process will pit White House economic adviser Kevin Hassett against several other contenders, including former Fed governor Kevin Warsh, as Trump seeks a successor to current chair Jerome Powell, whose term expires in mid-May.
Final shortlist set for interviews
According to senior administration officials, Treasury Secretary Scott Bessent has presented a shortlist to the president that includes Hassett, Warsh, Fed governors Christopher Waller and Michelle Bowman, and Rick Rieder, BlackRock’s chief investment officer.
Trump and Bessent are expected to hold at least one more round of interviews next week before the final decision is announced in early January. Trump discussed the process with reporters aboard Air Force One, stating,
“We’re going to be looking at a couple different people, but I have a pretty good idea of who I want.”
The new appointment would need Senate confirmation, a step that will follow after the official nomination. Susie Wiles, Trump’s chief of staff, may also attend the interviews.
Hassett’s position and potential term structure
Kevin Hassett, director of the National Economic Council, remains in the lead for the job despite reservations among some investors that his close relationship with the president might influence monetary policy. However, administration officials have suggested that Hassett’s term could be shortened to allow a leadership transition later in Trump’s second term.
The Financial Times reported that Hassett proposed filling the remainder of Jay Powell’s board term, which runs until January 2028. This arrangement would allow for a shorter chairmanship. That setup might enable Bessent, who publicly declined an immediate move to the Fed, to assume the chair role later in the term if circumstances change.
Hassett previously worked at the Fed early in his career and served in multiple roles during Trump’s first administration. His supporters describe him as a disciplined economist with deep institutional understanding.
Trump’s expectations for monetary policy
Trump has repeatedly criticized Powell for not cutting interest rates more aggressively. He told Politico that support for immediate reductions in borrowing costs would be a key factor in selecting a new chair.
“All candidates have made clear they support further easing,” Trump said of the finalists.
At the Wall Street Journal CEO Council on Tuesday, Hassett reaffirmed his belief that there remains “plenty of room” to lower interest rates further. But he added that “if inflation rises the calculation may change.” He emphasized that economic factors should guide decisions rather than political considerations.
“I’ve got lots of friends at the Fed that are on both sides,” Hassett said. “You just do the right thing.”
Hassett said that his guiding principle in leading the central bank would be data-driven policy and institutional independence. He underscored this point by noting that “the most important job” of a Fed chair is “to be looking at the economic data and to avoid being part of politics.”
Regulatory backdrop and investor concerns
The next Fed chair appointment comes as the central bank faces pressure to balance economic growth against persistent inflation. The Fed is widely expected to lower rates by a quarter point this week, marking the third consecutive cut this year, yet inflation remains above the target of 2%.
Some investors have expressed concern that a sharp series of rate cuts could unsettle the $30 trillion Treasury market. According to the Financial Times, bond investors have warned the Treasury that aggressive easing might lead to higher long-term inflation and destabilize market confidence.
Nevertheless, Hassett’s camp has argued that a calculated approach to rate adjustments, grounded in real-time data, would prevent such risks.
Timing of decision and next steps
The White House is expected to finalize the selection process by early January, leaving sufficient time for Senate confirmation before Powell’s term concludes. The incoming chair will oversee a Fed navigating monetary easing, market volatility, and political scrutiny ahead of an election year.
Trump’s economic team, led by Bessent, has acknowledged the significance of the next chair’s role in shaping monetary policy as the administration pursues sustained economic expansion.
The White House has issued no official statement on the finalists. “Personnel decisions to be made by President Trump will be announced directly by President Trump himself. Any discussion until then is pointless speculation,” a spokesperson said.
While Hassett remains in pole position, the decision to carry out additional interviews shows that Trump has kept his options open. The next Federal Reserve chair will take office during a critical period for the U.S. economy, as investors await clarity on the direction of monetary policy under new leadership.
Roman Zaika
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