Treasury Secretary Benson revealed a heavy insider: Trump plans to start the Fed's leadership change in the fall
2025-07-04 09:18:49
On Thursday (July 3), U.S. Treasury Secretary Benson dropped a bombshell in an interview with CNBC: the Trump administration will officially start the search for a successor to Federal Reserve Chairman Powell this fall. This news has not only attracted widespread attention from the market and the media, but also added more uncertainty to the future direction of U.S. economic policies. In the interview, Benson also expressed important views on topics such as tariffs, inflation, interest rate policy, and whether he himself could serve as the chairman of the Federal Reserve.
Powell's position is in jeopardy as he looks to find a replacement
In the interview, Bessant made it clear that the Trump administration plans to start the search for a successor to Fed Chairman Powell this fall. He revealed that the government has locked in "a lot of good candidates", but the specific candidates have not yet been made public. Powell, the Fed chairman appointed by Trump during his first term, has been publicly criticized in recent years for his monetary policy conflicts with Trump's ideas. Trump has even publicly called on Powell to resign many times, but according to the law, the president has no right to directly fire the Fed chairman due to policy differences. This contradiction has made Powell's stay or departure the focus of market attention.
Bessent emphasized that the government will focus on promoting this appointment after Labor Day. He mentioned that Trump has been busy promoting major agendas such as peace agreements, trade agreements and tax bills recently, and the progress of these matters has made room for the nomination of the Fed chairman. This statement not only implies that the Trump administration attaches great importance to the future leadership of the Federal Reserve, but also foreshadows the political dynamics in the fall.
Bessant is confident tariffs won't push up inflation
In the interview, Bessant strongly defended the tariff policy implemented by Trump since he took office. He said that the tariff measures implemented since Trump took office in January have not caused the inflationary pressure that is worried about "so far". Bessant pointed out that the market initially reacted strongly to Trump's decision to impose high tariffs on most trading partners on April 2, and the stock market once plunged 15%. However, the market quickly rebounded afterwards, showing its adaptability to the tariff policy.
"There were concerns that tariffs would hurt the economy and shock the market, but it turns out that these concerns have not come true," Bessant said confidently. He further explained that although tariffs may cause a one-time increase in prices, in the long run, overall inflation levels will not rise significantly. This view is consistent with the general position of Trump administration officials, who believe that the upcoming tax bill will stimulate private sector investment and enhance the resilience of the US economy, thereby offsetting the short-term impact of tariffs.
Gaming at high interest rates
In the interview, Bessant made pointed comments on the Fed's monetary policy. He pointed out that the current interest rate range of 4.25% to 4.5% is already a "very high real interest rate" and based on the Fed's past models, interest rate cuts should have been initiated long ago. However, with unemployment low and inflation above the 2% target, Fed officials are cautious about cutting interest rates, worried that the Trump administration's tariff plan could push up prices.
Bessant warned that if the Fed continues to hold off and postpone rate cuts, it may have to take a more drastic rate cut in September. He said: "If they don't cut rates now, it doesn't matter, but it may lead to a bigger adjustment in the future." This statement not only reflects the Trump administration's dissatisfaction with the Fed's policies, but also implies that the government hopes to pressure the Fed to adjust its monetary policy.
The possibility of holding two positions sparks heated debate
One notable question is whether Bessant himself could be a popular candidate for Fed chairman. When asked if he could serve as both Treasury secretary and Fed chairman at the same time, Bessant did not completely deny the possibility, but mentioned that there had been no such precedent since the 1930s. He added that he was "very satisfied" with his current job as Treasury secretary, seemingly suggesting that he had no intention of pursuing a new role for the time being. However, the Federal Reserve Act clearly stipulates that members of the Board of Governors must perform their duties full-time, which legally excludes the possibility of Bessant holding two positions.
Bessent's announcement that he will start looking for a successor to Powell in the fall may cause market concerns about the future policy direction of the Federal Reserve. Powell is known for his prudent approach. If his successor is more inclined to Trump's low interest rate stance, the dollar may be under downward pressure due to expectations of loose monetary policy. In the short term, market uncertainty may lead to increased volatility in the dollar, especially before the specific nominee is announced.
It is worth noting that Trump recently appointed Secretary of State Rubio as National Security Advisor, a decision that broke decades of practice since Kissinger and sparked discussions about the Trump administration's "multi-front" personnel strategy. Although Bessant's statement was cautious, it undoubtedly added more room for speculation about whether he could become the chairman of the Federal Reserve.
Tax bill and economic stimulus
Bessant also mentioned the tax bill in the interview. He said that this bill will further enhance the competitiveness of the US economy by stimulating private sector investment. The Trump administration firmly believes that the combination of tax incentives and tariff policies will inject new vitality into the US economy. Although there are concerns about the possible price increases caused by tariffs, Bessant emphasized that the government's overall economic strategy will ensure long-term stability.
He also mentioned that the Trump administration's recent progress in peace agreements, trade agreements and other areas has demonstrated efficient execution. These achievements have laid the foundation for subsequent work such as the nomination of the Federal Reserve Chairman, and also provided endorsement for the Trump administration's bold layout in economic policies.
Bessant's interview undoubtedly dropped a bombshell on the US economy and politics. The Trump administration plans to start the transition of the Fed chairman in the fall, and Powell's stay or departure has become the focus; the statement that the tariff policy has not caused inflation is an attempt to calm market concerns; the future direction of the Fed's interest rate policy may affect the global financial market; and Bessant's potential role has added more drama to this event.
Fed's leadership change plan emerges
Powell's position is in jeopardy as he looks to find a replacement
In the interview, Bessant made it clear that the Trump administration plans to start the search for a successor to Fed Chairman Powell this fall. He revealed that the government has locked in "a lot of good candidates", but the specific candidates have not yet been made public. Powell, the Fed chairman appointed by Trump during his first term, has been publicly criticized in recent years for his monetary policy conflicts with Trump's ideas. Trump has even publicly called on Powell to resign many times, but according to the law, the president has no right to directly fire the Fed chairman due to policy differences. This contradiction has made Powell's stay or departure the focus of market attention.
Bessent emphasized that the government will focus on promoting this appointment after Labor Day. He mentioned that Trump has been busy promoting major agendas such as peace agreements, trade agreements and tax bills recently, and the progress of these matters has made room for the nomination of the Fed chairman. This statement not only implies that the Trump administration attaches great importance to the future leadership of the Federal Reserve, but also foreshadows the political dynamics in the fall.
Tariff policy: short-term shock or long-term peace of mind?
Bessant is confident tariffs won't push up inflation
In the interview, Bessant strongly defended the tariff policy implemented by Trump since he took office. He said that the tariff measures implemented since Trump took office in January have not caused the inflationary pressure that is worried about "so far". Bessant pointed out that the market initially reacted strongly to Trump's decision to impose high tariffs on most trading partners on April 2, and the stock market once plunged 15%. However, the market quickly rebounded afterwards, showing its adaptability to the tariff policy.
"There were concerns that tariffs would hurt the economy and shock the market, but it turns out that these concerns have not come true," Bessant said confidently. He further explained that although tariffs may cause a one-time increase in prices, in the long run, overall inflation levels will not rise significantly. This view is consistent with the general position of Trump administration officials, who believe that the upcoming tax bill will stimulate private sector investment and enhance the resilience of the US economy, thereby offsetting the short-term impact of tariffs.
Fed interest rate policy: Delaying rate cuts may trigger bigger moves
Gaming at high interest rates
In the interview, Bessant made pointed comments on the Fed's monetary policy. He pointed out that the current interest rate range of 4.25% to 4.5% is already a "very high real interest rate" and based on the Fed's past models, interest rate cuts should have been initiated long ago. However, with unemployment low and inflation above the 2% target, Fed officials are cautious about cutting interest rates, worried that the Trump administration's tariff plan could push up prices.
Bessant warned that if the Fed continues to hold off and postpone rate cuts, it may have to take a more drastic rate cut in September. He said: "If they don't cut rates now, it doesn't matter, but it may lead to a bigger adjustment in the future." This statement not only reflects the Trump administration's dissatisfaction with the Fed's policies, but also implies that the government hopes to pressure the Fed to adjust its monetary policy.
Will Besant himself take over the Fed?
The possibility of holding two positions sparks heated debate
One notable question is whether Bessant himself could be a popular candidate for Fed chairman. When asked if he could serve as both Treasury secretary and Fed chairman at the same time, Bessant did not completely deny the possibility, but mentioned that there had been no such precedent since the 1930s. He added that he was "very satisfied" with his current job as Treasury secretary, seemingly suggesting that he had no intention of pursuing a new role for the time being. However, the Federal Reserve Act clearly stipulates that members of the Board of Governors must perform their duties full-time, which legally excludes the possibility of Bessant holding two positions.
Bessent's announcement that he will start looking for a successor to Powell in the fall may cause market concerns about the future policy direction of the Federal Reserve. Powell is known for his prudent approach. If his successor is more inclined to Trump's low interest rate stance, the dollar may be under downward pressure due to expectations of loose monetary policy. In the short term, market uncertainty may lead to increased volatility in the dollar, especially before the specific nominee is announced.
It is worth noting that Trump recently appointed Secretary of State Rubio as National Security Advisor, a decision that broke decades of practice since Kissinger and sparked discussions about the Trump administration's "multi-front" personnel strategy. Although Bessant's statement was cautious, it undoubtedly added more room for speculation about whether he could become the chairman of the Federal Reserve.
The Trump Administration’s Economic Ambitions
Tax bill and economic stimulus
Bessant also mentioned the tax bill in the interview. He said that this bill will further enhance the competitiveness of the US economy by stimulating private sector investment. The Trump administration firmly believes that the combination of tax incentives and tariff policies will inject new vitality into the US economy. Although there are concerns about the possible price increases caused by tariffs, Bessant emphasized that the government's overall economic strategy will ensure long-term stability.
He also mentioned that the Trump administration's recent progress in peace agreements, trade agreements and other areas has demonstrated efficient execution. These achievements have laid the foundation for subsequent work such as the nomination of the Federal Reserve Chairman, and also provided endorsement for the Trump administration's bold layout in economic policies.
Summary: The autumn "Fed Storm" is coming
Bessant's interview undoubtedly dropped a bombshell on the US economy and politics. The Trump administration plans to start the transition of the Fed chairman in the fall, and Powell's stay or departure has become the focus; the statement that the tariff policy has not caused inflation is an attempt to calm market concerns; the future direction of the Fed's interest rate policy may affect the global financial market; and Bessant's potential role has added more drama to this event.
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