The search for a new chairman of the US central bank has come one step closer. After weeks of talks in Washington, the list of contenders has been significantly shortened.
Trump administration filters candidates for Fed leadership
Donald Trump’s administration has reduced the list of candidates for the next chairman of the Federal Reserve (Fed) from eleven to five names, according to CNBC. The selection was made after a series of interviews conducted by Treasury Secretary Scott Bessent.
The remaining contenders are:
- Michelle Bowman – current Fed Vice Chair for Oversight
- Christopher Waller – sitting Fed Governor
- Kevin Hassett – director of the National Economic Council
- Kevin Warsh – former Fed Governor
- Rick Rieder – CIO Fixed Income bij BlackRock
The final choice is not expected until after Thanksgiving, which falls on November 27. It will take a little longer, partly because Bessent is currently involved in IMF/World Bank meetings and a trip through Asia with Trump. The chosen candidate may first be nominated as governor, depending on which term becomes available first.
Rick Rieder of BlackRock, the world’s largest asset manager, is said to have made an impression during the talks. His experience outside the Fed and strong reputation on Wall Street would make him a serious favorite.
Political pressure on the Fed is increasing
The current chairman of the Fed is Jerome Powell, who was appointed by Donald Trump in 2018. His second term ends on May 15, 2026. Since his re-election, Trump has been openly critical of Powell.
The president has been pushing for interest rate cuts for some time, partly because of the enormous national debt of the United States, which currently stands at around $38 trillion. That debt is putting a heavy burden on government finances at the current interest rate level. Against Trump’s wishes, Powell only implemented the first interest rate cut of the year in September.
Trump is also increasing the pressure on the Federal Reserve. After criticism of current Chairman Jerome Powell, Fed Governor Lisa Cook also came under fire in August.
Trump claims Lisa Cook was involved in mortgage fraud. However, it raises concerns about the political influence on an institution that traditionally operates independently. The Cook case also followed the departure of Adriana Kugler, who was replaced by Trump loyalist Stephen Miran. If Cook does indeed leave, Trump would regain influence over the voting Federal Open Market Committee (FOMC).
The market is now looking forward to the end of October, when the Federal Reserve will make another interest rate decision. Expectations on the futures market remain optimistic. For example, the chance of an interest rate cut of 25 basis points is currently estimated at 98.3 percent.
Source: https://newsbit.nl/trump-zoekt-een-nieuwe-fed-baas-dit-zijn-de-5-kanshebbers/
