New Fed Chair Getting Closer

Donald Trump is edging closer to announcing who will replace Jerome Powell as Chair of the Federal Reserve. Powell’s term ends in May, and the final round of interviews is set to begin this week. According to the Financial Times, the president and Treasury Secretary Scott Bessent are scheduled to meet on Wednesday with former Fed governor Kevin Warsh. Despite that meeting, the frontrunner remains Kevin Hassett, head of the National Economic Council.

Hassett has gained the upper hand largely because he has long supported Trump’s push for sharp interest-rate cuts. Unlike Powell—who resisted more aggressive easing and was criticized for it—Hassett has openly backed even a half-percentage-point reduction in December. He insists, however, that he would maintain the central bank’s independence if appointed.

Others still on the shortlist include the Fed’s Christopher Waller and Michelle Bowman, as well as Rick Rieder of BlackRock. All of them favor lower borrowing costs, reflecting pressures from trade policy and the uncertainty created by tariffs.

A final decision is expected before year-end, with Bessent leading the selection process. Trump has signaled he wants a clear shift in the Fed’s policy direction soon.

Meanwhile, markets are gearing up for the central bank’s next meeting. After two rate cuts this fall—bringing the total to 1.5 percentage points over fifteen months—some policymakers believe rates have reached a neutral level. Others argue that policy remains too restrictive, raising the possibility of another split vote. Most observers still expect the Fed to lower rates again on December 10, though Powell has cautioned that nothing is guaranteed.