Treasury Secretary Scott Bessent confirms search for Fed Chair Jerome Powell’s successor is underway

Treasury Secretary Scott Bessent confirmed on Tuesday that the Trump administration has initiated a “formal process” to identify a potential successor to Federal Reserve Chair Jerome Powell, whose current term ends in May 2026. Speaking on Bloomberg TV, Bessent said, “There’s a formal process that’s already starting… There are a lot of good candidates inside and outside the Federal Reserve.”

The comments come amid growing White House frustration with Powell’s monetary policy, particularly his refusal to slash interest rates despite President Donald Trump’s repeated calls for aggressive easing.

Shortlist of contenders emerges

Bessent himself is reportedly on the shortlist of candidates, alongside former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett. However, he downplayed any rumors of a parallel or “shadow” Fed chair arrangement, calling such speculation potentially destabilising.

“There’s been a lot of talk of a shadow Fed chair causing confusion in advance of his or her nomination, and I can tell you, I think it would be very confusing for the market for a former Fed chair to stay on also,” he said.

No dual role, but will follow Trump’s lead

When asked whether he would consider taking on a dual role as Treasury Secretary and Fed Chair, Bessent sidestepped the question but emphasised loyalty to the President. “I think I have the best job in town. I will do what President Trump wants,” he said. “I am part of the decision-making process, but again, the final decision is gonna be President Trump’s.”

Trump intensifies attacks on Powell

President Trump is critical about Powell. On Monday, Trump slammed Powell for not lowering interest rates, despite signs of cooling inflation.

“We have a bad Fed chairman, really bad,” Trump told reporters. “I tried being nice to the guy. It doesn’t help. He’s like a knucklehead. Oh, he’s a knucklehead, a stupid guy. He really is.”

The president has repeatedly said rates should fall below 1%, far below the current range of 4.25% to 4.5%.

White House: Powell won’t be fired — yet

Despite the rhetoric, Bessent made clear that the administration does not currently plan to remove Powell before his term expires. “We’re not looking to fire him,” Bessent said, even as the administration explores legal and political avenues to reshape Fed leadership in 2025.

Scrutiny over Fed renovation and Senate testimony

The White House is also reportedly pushing for a congressional investigation into whether Powell misled lawmakers over the $2.5 billion renovation of the Federal Reserve’s headquarters. That scrutiny adds to the pressure on the Fed chair, even as he maintains his refusal to resign or commit to staying on as a Fed governor after his chair term ends.

Powell’s governor term runs until 2028, which would allow him to remain a voting member of the Federal Open Market Committee (FOMC) beyond 2026 — a possibility that is further complicating Trump’s calculations.