Trump announces Scott Bessent won't take over Powell's position as Fed chair, amid escalating conflicts with the central bank.
President Donald Trump has broadened the search for a successor to current Federal Reserve Chair, Jerome Powell, indicating a more thorough and deliberate selection process. The expanded candidate pool now includes notable figures such as James Bullard, Christopher Waller, and Marc Sumerlin.
The formal process for selecting a Federal Reserve Chair involves the President nominating a candidate who must then be confirmed by the Senate in a separate vote distinct from their confirmation as a member of the Federal Reserve Board of Governors. The Chair and two Vice Chairs serve four-year terms under this process.
Trump's approach aims to balance thorough vetting with efficiency while extending the timeline, increasing leadership uncertainty as Powell's term ends in May 2026. The President's strategy reflects his desire to potentially shift Fed policy tone by selecting a chair aligned with his views, as he has expressed dissatisfaction with Powell’s cautious monetary policy stance.
Meanwhile, the Federal Reserve held its key interest rate steady for the fifth consecutive meeting, a decision that Trump criticized on Truth Social after the announcement. Tensions between Trump and Powell have continued to rise, with the central bank's interest rate decisions being a particular point of friction.
Powell, however, has asserted he will never leave his position voluntarily. In response to economic conditions, he stated that the central bank is in a good position to cut rates if necessary.
In a related development, President Trump announced that Treasury Secretary Steven Mnuchin will not be in the running to become the next chair of the Federal Reserve. Mnuchin stated that he wants to work with Trump and remain in his current position as Treasury Secretary.
The administration has begun a "formal process" to select Powell's successor, with tariffs pushing inflation data higher and increasing consumer prices, according to Powell. The economy experienced 3% growth in the second quarter, as reported by Trump. Despite inflation remaining above the Fed's 2% longer-run goal, the labor market is at full employment.
As the search for a new Fed Chair continues, the focus remains on finding a candidate who can balance monetary policy in a way that supports economic growth while maintaining price stability. The announcement of a new chair is expected well before Powell's term ends in May 2026.
- The election of a new Federal Reserve Chair, who will serve a four-year term, is crucial, considering the current economic climate with inflation pushing tariffs higher and increasing consumer prices.
- As President Trump seeks a successor to current Federal Reserve Chair, Jerome Powell, politics plays a significant role, as Trump has expressed his dissatisfaction with Powell’s monetary policy stance.
- In the realm of general news, Trump's criticism of the Federal Reserve's decision to keep interest rates steady continues, highlighting a point of friction between the two.
- Amidst war-and-conflicts and policy-and-legislation debates, the search for Powell's successor proceeds, with the chosen candidate expected to strike a balance between monetary policy, promoting economic growth, and maintaining price stability.
