Treasury Secretary Scott Bessent has narrowed the crowded field of candidates for the position of Federal Reserve Chairman to five candidates after a series of lengthy two-hour interviews.
The reduction from 11 candidates to five, announced later this week, is the most important step yet in a process that will continue until early next year.
The next Fed leader could be named by January, but officials emphasized that he may first be named president before being promoted to chairman.
The remaining five names are Michelle Bowman, the Fed’s vice chair for oversight, Christopher Waller, a Fed director, Kevin Hassett, a director at the National Economic Council, Kevin Warsh, a past Fed governor, and Rick Rieder, chief investment officer of BlackRock’s fixed income division. These names will be questioned again in the coming weeks.
Scott Bessent preparing for further interviews with candidates
Mr. Scott will lead the next round of interviews himself, accompanied by two senior Treasury Department officials and two senior White House officials. We plan to meet with each candidate again by the end of the year. But the calendar is tight.
Next week, Scott will attend a meeting of the World Bank and IMF in Washington. After that, he will go on a long tour of Asia with President Donald Trump. Because of this schedule, officials said interviews may not be completed until after Thanksgiving.
Once the interviews are complete, Scott plans to hand over a small list of finalists directly to Trump. The president will then make the final decision. Officials noted that the process could be rolled out in stages. A candidate may first take the governor’s seat and then be named speaker.
That decision will depend on which seats are available. Jerome Powell’s term as chairman ends in May, but he has only two years left in his role as governor.
The other seat, previously held by Adrianna Coogler and currently held by Stephen Milan, expires in January, with a full 14-year term. Putting a new Fed leader in the post could give the administration more time and stability, but officials cautioned that nothing was settled yet.
President Trump had previously named Warsh, Hassett and Waller as finalists in an earlier announcement. That means Bowman and Reeder are the only fresh names being advanced to the White House. Compared to past administrations, this administration has kept the process more open and publicly revealed the pool of names in response to the transition.
The political battle over the Federal Reserve is more intense than ever. President Trump has called for deep interest rate cuts and repeatedly attacked the Fed for not moving quickly enough. He has also threatened to fire Powell outright, and went even further when he fired Fed Board member Lisa Cook over allegations of mortgage fraud.
Cook denied those claims, and a lower court blocked the move. The case now goes to the Supreme Court in January. The drama surrounding Mr. Cook has deepened questions about whether the White House respects the Fed’s independence, making the decision on who will become the Fed’s next chairman a critical juncture.
Rick Wheel’s impression and Scott’s impression are great.
Treasury officials also outlined what Scott would like to see in the next Fed leader. They said they are looking for someone who is open to new ideas in running monetary policy and someone with experience in economics, regulation and management.
Mr. Scott has already written an essay denouncing the Fed’s overgrowth and what he calls “mission creep.” In his article, he called for a review of central banks’ mandates, instruments, and structures. He argued that the Fed should become smaller and rely less on policies such as quantitative easing.
Officials stressed that no single candidate has the upper hand at this point. Still, they acknowledged that Rick Reeder caught Scott’s attention. Mr. Rieder is well known in the markets and frequently appears on CNBC to discuss bonds and central bank movements.
At BlackRock, he oversees one of the world’s largest fixed income teams. His detailed analysis of the Fed is widely supported by investors. One factor working in his favor is that he is the only candidate who has never worked at the Fed. Some officials suggested it could help him bring an outside perspective to an organization often seen as too insular.
The administration’s process now moves to the next round of talks, interviews and travel. With Mr. Powell’s term ending in May and Mr. Millan’s in January, decisions made in the coming weeks will set the Fed’s direction for years to come.
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