Trump says Treasury Secretary Bessent ‘opted out’ of Fed chair race, 4 others in contention
&imwidth=600&imheight=450&format=webp&quality=medium "Trump says Treasury Secretary Bessent ‘opted out’ of Fed chair race, 4 others in contention")
US Treasury Secretary Scott Bessent Photograph: (Reuters)
Donald Trump’s constant criticism of the Fed and his support for significantly lower rates have raised concerns about political interference in the central bank’s decision-making. Trump believes lower rates may give a boost from voters who cannot afford mortgages and other loans now.
President Donald Trump said on Tuesday that Treasury Secretary Scott Bessent is no longer being considered as a replacement for Jerome Powell as Federal Reserve Chair and he has narrowed the field of potential future Federal Reserve chairs to four candidates. Trump did not disclose who all are in contention, but revealed that Bessent, who previously considered a leading candidate, has himself opted out of contention.
“Well, I love Scott, but he wants to stay where he is,” Trump told CNBC during a ‘Squawk Box’ interview. “I asked him just last night, ‘Is this something you want?’ [Bessent said], ’Nope, I want to stay where I am. He actually said, ‘I want to work with you.’ It’s such an honour. I said, ‘That’s very nice. I appreciate that’.”
Trump has been critical of Powell because the Fed hasn’t lowered interest rates and refers to Powell as “too late,” “a numbskull,” and “a complete moron.”
In a surprise announcement, Fed Governor Adriana Kugler announced that she is resigning effective this Friday. The development ensures Trump can install another of his appointees to the Fed Board of Governors at a time when the White House is aggressively pushing the central bank to lower interest rates.
‘Both Kevins are very good’: Trump
Among the likely candidates in the fray are former Governor Kevin Warsh and Kevin Hassett, the National Economic Council director and a key Trump adviser. Both have advocated for lower rates. Fed Governor Christopher Waller is also thought to be in the running.
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“Both Kevins are very good, and there are other people that are very good, too,” Trump said, adding that Kugler’s resignation “was a pleasant surprise.”
Fed Chair Jerome Powell frequent target of Trump’s criticism
Current Chair Jerome Powell, whose term ends in May 2026, has been a frequent target of Trump’s criticism, and there has been speculation that the president would name a “shadow chair” who could help undermine Powell until his term expires. Trump did not commit to taking that approach but conceded that it is “a possibility.”
Trump nominated Powell for the Fed job in 2017, during his first term as president. The Senate then confirmed Powell the following February. Trump alleged Tuesday that Powell told him, “Sir, I’ll keep interest rates so low. I’m a low interest rate person.”
Last week, the Fed voted to hold its benchmark interest rate steady in a range between 4.25%-4.5% even as markets expect it to approve its next cut in September. The central bank lowered its policy rate a full percentage point from September through December 2024, moves that Trump has said were politically motivated to help Democratic presidential nominee Kamala Harris.
Trump’s constant criticism of the Fed and support for significantly lower rates have raised concerns about political interference in the central bank’s decision-making.
Trump believes lower rates may give a boost from voters who cannot afford mortgages and other loans now, but it could hurt the economy if it leads to higher inflation.
