Donald Trump is preparing to begin a final round of interviews for the next Federal Reserve chair, setting up a contest led by White House economic adviser Kevin Hassett and several other contenders vying to replace Jay Powell when his term ends in May, according to a Financial Times report.
The selection process, which is being closely monitored by financial markets, reflects both the administration’s policy priorities and concerns among investors about the direction of US monetary policy.
Hassett leads but faces continued competition
According to senior administration officials, Trump and Treasury secretary Scott Bessent are expected to meet former Fed governor Kevin Warsh on Wednesday as part of the concluding interview stage.
Despite Hassett’s position as director of the National Economic Council and his status as the current frontrunner, the White House’s decision to continue interviews underscores that his nomination is not assured.
Hassett remains the favourite, officials said, though some Wall Street investors worry he may be too closely aligned with the president and may be inclined to cut interest rates aggressively.
Concerns about potential instability in the $30tn Treasury market have intensified following reports that bond investors fear indiscriminate rate cuts could fuel persistently high inflation.
Trump, speaking aboard Air Force One after the Financial Times reported on the upcoming meetings, said he was weighing “a couple different people” but already had “a pretty good idea” of his preferred candidate.
Bessent is said to have provided the administration with a shortlist of four names, including Hassett and Warsh, with the remaining selections expected to come from a broader pool that features Fed governors Christopher Waller and Michelle Bowman, as well as BlackRock executive Rick Rieder.
Possibility of a shortened term
The White House is expected to conduct at least one additional interview next week, before Trump announces a decision in early January.
Trump’s chief of staff, Susie Wiles, may also join the discussions. Any nominee must ultimately be confirmed by the Senate.
Officials have considered the option of Hassett serving a truncated term.
People familiar with the discussions said Hassett floated the idea of taking Powell’s seat on the Fed board of governors, which expires in January 2028.
Powell has yet to decide whether he will remain as governor after his chair term ends.
A shortened tenure could create an opportunity later in the second Trump administration for Bessent—whom the president has repeatedly identified as his preferred choice for Fed chair—to move to the central bank.
Bessent has, however, previously indicated he does not want the role.
Investors seek signals on policy independence
Hassett has recently sought to reassure markets about his approach, emphasising the importance of central bank independence.
Speaking at a Wall Street Journal event, he acknowledged that the economy could still warrant additional rate cuts, but stressed that the Fed chair’s primary responsibility was to rely on economic data and avoid political influence.
Trump has frequently criticised Powell for not lowering rates more aggressively.
The Fed is widely expected to cut borrowing costs again by a quarter percentage point, marking its third consecutive reduction and bringing the federal funds rate to a three-year low of 3.5% to 3.75%.
The president has called for rates to fall as low as 1%.
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