Fed chair candidate locked in, Trump says decision expected by the end of the year

As the term of the current Fed Chairman Powell nears its end, the selection process for the next chairman has entered its final stage.

According to reports, Treasury Secretary Basant said to the media on Air Force One on Monday that the candidate pool for the Fed chair has been narrowed down to five people. They are: current Fed governors Christopher Waller and Michelle Bowman, former Fed governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and BlackRock Inc. executive Rick Rieder.

Besent revealed that he plans to conduct a new round of interviews and hopes to submit a “list of excellent candidates” to President Trump after the Thanksgiving holiday. Trump himself also confirmed to the media that he expects to make a final decision on nominees by the end of the year.

This progress comes just as the Fed is about to hold a policy meeting. The market widely expects that the Federal Open Market Committee will once again cut interest rates by 25 basis points at the two-day meeting ending on October 29. For investors, the choice of the next Fed chair is crucial, as it will directly affect the direction of future U.S. monetary policy and the independence of the central bank.

Five People Compete for the Fed Chair Position

The five-person list confirmed by Secretary of Treasury Besant includes senior figures from the Fed, the White House, and Wall Street. Besant himself is leading the interview process for this selection.

Christopher Waller and Michelle Bowman on the list are both current members of the Fed Board, with extensive experience within the central banking system. Kevin Warsh served as a Fed governor and played an important role during the financial crisis. Kevin Hassett, the director of the White House Council of Economic Advisers, represents candidates from the government executive branch. The last one is Rick Rieder, an executive from asset management giant BlackRock, who will bring important market perspectives to the selection.

In addition, President Trump reiterated on Monday that he does not expect Treasury Secretary Mnuchin to leave his current position to take over the Fed.

The timeline for the selection process has become very clear. Besant stated that he plans to submit the final list of candidates to the president after Thanksgiving, following more interviews.

Trump has set a deadline to make a decision by the end of the year. On Monday, Trump criticized the current chairman Powell, whom he personally appointed, during a media speech, stating that he is “not smart at all” and accusing Powell of failing to significantly cut interest rates, which has hindered economic growth.

Interest rate cut expectations become a key background

Criticism of the current chairman is consistent with Trump's long-standing public pressure on monetary policy. Before the Fed decision-makers restored interest rate cuts, Trump had stated that he hoped the central bank would lower rates by three percentage points.

Currently, the market widely expects the Fed to announce a 25 basis point rate cut at this week's meeting, which would be the second consecutive such action. In this context, the choice of the new chairperson not only relates to the future interest rate path of the Fed but also concerns its policy independence when facing political pressure, which is a core issue closely watched by investors.

According to the existing information, Powell's term as the chair of the Fed will end in May next year. The nomination for the next chair is likely to be combined with the appointment for a 14-year term for a Fed governor that will become vacant in early 2026.