Trump says Treasury Secretary Bensont 'doesn't want' to be Fed chair, four candidates considered
2025-08-05 23:11:42
Trump said on his show on Tuesday that he had narrowed his field of candidates for the next Federal Reserve chairman to four, but did not include Treasury Secretary Scott Bessant, who had been considered the favorite. Trump did not disclose the specific candidates, but he said Bessant had voluntarily withdrawn from the competition.
"I admire Scott, but he wants to stay in his current position," Trump said. "I asked him last night, 'Is that the position you want?' He said, 'No, I want to stay where I am.' He also said, 'I want to work with you.' It would be an honor. I responded, 'That's great, I appreciate it.'"
The news comes after Fed Governor Adriana Kugler unexpectedly announced last Friday that she would resign this Friday, a move that provides Trump with an opportunity to reappoint a member of the Fed's board of governors at a time when the White House is actively pushing the Fed to lower interest rates.
Possible candidates include former Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett, both of whom advocate for lower interest rates. Federal Reserve Governor Christopher Waller is also considered a candidate. "Both Kevins are excellent, and there are other excellent candidates," Trump said, calling Kugler's resignation "an unexpected surprise."
Current Federal Reserve Chairman Jerome Powell's term ends in May 2026. Powell has been a target of criticism from Trump, leading to speculation that Trump might appoint a "shadow chair" to weaken Powell's influence until the end of his term. Trump has not explicitly committed to such a strategy, but has said it's a possibility.
Trump nominated Powell to be Fed chair during his first term in office in 2017, and the Senate confirmed his nomination the following February. Trump claimed on Tuesday that Powell once told him, "Sir, I'm going to keep interest rates very low. I'm a low interest rate advocate."
The Federal Reserve decided last week to keep its benchmark interest rate unchanged at 4.25%-4.5%. Markets expect the Fed to approve its next rate cut in September. The Fed already cut its policy rate by a full percentage point between September and December 2024, moves that Trump described as politically motivated to help Democratic presidential candidate Kamala Harris.
Bloomberg reports that Trump's continued pressure on the Federal Reserve reflects his desire to strengthen his control over monetary policy by appointing candidates aligned with his economic philosophies. The article notes that Kevin Warsh and Kevin Hassett, whose support for low interest rates and pro-market policies aligns with Trump's economic vision. Bloomberg also notes that there are concerns within the Fed about potential Trump intervention, which could threaten the central bank's independence. Market analysts predict that if Trump successfully nominates a chairperson inclined toward easing monetary policy, the dollar could face downward pressure, while the stock market could see a short-term rally on expectations of looser monetary policy.
Reuters reported that Kugler's resignation may be linked to pressure from the Trump administration on the Federal Reserve. The report mentioned that Christopher Waller, a current Fed governor, was considered a strong contender for the chairmanship due to his dovish stance on interest rates. Reuters analysis suggests that Trump may exploit Kugler's vacancy to quickly promote his own candidate to the Fed Board, thereby preparing for a transition after Powell's term ends in 2026.
The Wall Street Journal report emphasizes that Trump's criticism of Powell stems from his frustration with high interest rates, which he believes are hindering economic growth. The article notes that Kevin Hassett, a longtime economic adviser to Trump, may have an advantage among candidates due to his strong support base within the White House. Furthermore, the report notes that increased market uncertainty about the Federal Reserve's future policies has led to recent volatility in bond yields, and investors are closely watching Trump's nomination decision.
Discussions on the social media platform X have revealed that many users are concerned about Trump's attempts to undermine the independence of the Federal Reserve. Some economic commentators on X have noted that Warsh and Hassett's economic philosophies, which favor deregulation and low interest rates, may align well with Trump's "America First" policies. However, others believe that if the Fed completely succumbs to political pressure, it could lead to long-term economic instability.
"I admire Scott, but he wants to stay in his current position," Trump said. "I asked him last night, 'Is that the position you want?' He said, 'No, I want to stay where I am.' He also said, 'I want to work with you.' It would be an honor. I responded, 'That's great, I appreciate it.'"
The news comes after Fed Governor Adriana Kugler unexpectedly announced last Friday that she would resign this Friday, a move that provides Trump with an opportunity to reappoint a member of the Fed's board of governors at a time when the White House is actively pushing the Fed to lower interest rates.
Possible candidates include former Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett, both of whom advocate for lower interest rates. Federal Reserve Governor Christopher Waller is also considered a candidate. "Both Kevins are excellent, and there are other excellent candidates," Trump said, calling Kugler's resignation "an unexpected surprise."
Current Federal Reserve Chairman Jerome Powell's term ends in May 2026. Powell has been a target of criticism from Trump, leading to speculation that Trump might appoint a "shadow chair" to weaken Powell's influence until the end of his term. Trump has not explicitly committed to such a strategy, but has said it's a possibility.
Trump nominated Powell to be Fed chair during his first term in office in 2017, and the Senate confirmed his nomination the following February. Trump claimed on Tuesday that Powell once told him, "Sir, I'm going to keep interest rates very low. I'm a low interest rate advocate."
The Federal Reserve decided last week to keep its benchmark interest rate unchanged at 4.25%-4.5%. Markets expect the Fed to approve its next rate cut in September. The Fed already cut its policy rate by a full percentage point between September and December 2024, moves that Trump described as politically motivated to help Democratic presidential candidate Kamala Harris.
Bloomberg reports that Trump's continued pressure on the Federal Reserve reflects his desire to strengthen his control over monetary policy by appointing candidates aligned with his economic philosophies. The article notes that Kevin Warsh and Kevin Hassett, whose support for low interest rates and pro-market policies aligns with Trump's economic vision. Bloomberg also notes that there are concerns within the Fed about potential Trump intervention, which could threaten the central bank's independence. Market analysts predict that if Trump successfully nominates a chairperson inclined toward easing monetary policy, the dollar could face downward pressure, while the stock market could see a short-term rally on expectations of looser monetary policy.
Reuters reported that Kugler's resignation may be linked to pressure from the Trump administration on the Federal Reserve. The report mentioned that Christopher Waller, a current Fed governor, was considered a strong contender for the chairmanship due to his dovish stance on interest rates. Reuters analysis suggests that Trump may exploit Kugler's vacancy to quickly promote his own candidate to the Fed Board, thereby preparing for a transition after Powell's term ends in 2026.
The Wall Street Journal report emphasizes that Trump's criticism of Powell stems from his frustration with high interest rates, which he believes are hindering economic growth. The article notes that Kevin Hassett, a longtime economic adviser to Trump, may have an advantage among candidates due to his strong support base within the White House. Furthermore, the report notes that increased market uncertainty about the Federal Reserve's future policies has led to recent volatility in bond yields, and investors are closely watching Trump's nomination decision.
Discussions on the social media platform X have revealed that many users are concerned about Trump's attempts to undermine the independence of the Federal Reserve. Some economic commentators on X have noted that Warsh and Hassett's economic philosophies, which favor deregulation and low interest rates, may align well with Trump's "America First" policies. However, others believe that if the Fed completely succumbs to political pressure, it could lead to long-term economic instability.
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