Five Candidates Shortlisted, Countdown Begins for Federal Reserve Leadership Transition
On Monday local time, U.S. Treasury Secretary Scott Bessent, while accompanying President Trump aboard Air Force One, revealed to reporters that five candidates have officially been shortlisted for the final selection of the Federal Reserve Chair successor. Trump stated that he plans to make the final appointment decision by the end of the year.
The candidates include current Federal Reserve Governor Christopher Waller, Michelle Bowman, former Fed Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and BlackRock's executive Rick Rieder.
Bessent emphasized that this list was finalized after multiple rounds of policy evaluations and personal interviews, "Each candidate has profound insights into the future direction of U.S. monetary policy."
Trump: Decision by Year-End, Bessent Not Considered
In an interview, Trump clarified that he will consult with the main economic advisors in "a few weeks" and confirm the new chair candidate by the end of the year. He added, "We need someone who understands the balance between economic growth and employment, while also having the resolve to combat inflation."
When asked if Treasury Secretary Bessent might be considered for the Federal Reserve Chair, Trump denied this speculation: "He is performing well as Treasury Secretary, and I want him to stay in that position."
Recently, Trump has repeatedly expressed dissatisfaction with the speed of Federal Reserve interest rate cuts, stating that "policy actions remain behind economic realities." He previously even called for a 300 basis point cut at once to boost economic momentum.
Upcoming Federal Reserve Meeting Attracts Attention on Policy Direction
The market widely anticipates that the Federal Reserve will lower the federal funds rate by another 25 basis points at the end of the two-day meeting on October 29, marking the second consecutive rate cut. This move is seen as a defensive measure against slowing economic growth and a weak job market.
Currently, the Federal Reserve's decision-making body faces an unusual split: one faction worries about persistently high inflation and advises against overly rapid easing; the other advocates for quicker rate cuts to prevent rising unemployment. Analysts point out that this division highlights the necessity for a future chair to strike a balance between "political expectations and central bank independence."
Powell's Term Nears End, Transition Might Proceed Smoothly
The term of current Chair Jerome Powell is set to end next May, but his position as a Fed Governor will continue into early 2028. Powell has not yet publicly stated whether he plans to step down. Should he choose to stay, he will continue as a member of the Federal Open Market Committee (FOMC) under the new chair, maintaining some policy influence.
Market analysis suggests that Powell has gradually adopted a moderate stance in recent months, leaving room for monetary policy flexibility and easing the transition for the new chair. Insiders at the Federal Reserve anticipate that even after a new chair is appointed, Powell will still be involved in some policy transition and communication efforts to ensure market stability.
Three Major Challenges for the New Chair
Whoever the final choice may be, the next Federal Reserve chair will face three core challenges:
**First,** how to maintain policy credibility with inflation still above target levels;
**Second,** preventing an economic recession through easing policies amid slowing job growth;
**Third,** managing political pressure from the White House while preserving the central bank's independence.
A Morgan Stanley analyst pointed out: "The next Federal Reserve chair is not just a technocrat but also a 'balancing artist' in the political environment."
As the end of the year approaches, global markets are once again focusing on Washington. This relay race of monetary power and political maneuvering is gradually reaching a critical moment.
