US President Donald Trump says he may appoint a new Federal Reserve Chair by the end of the year to replace current Fed chair Jerome Powell. Trump has not been silent about his disdain and lack of trust in Powell, and earlier this year hinted at firing the Fed Chair he appointed during his first term. Powell’s term is set to expire in May, with no talks of his returning to the position.
Per a Wall Street Journal report, Trump has narrowed his list for a new Fed chair down to five candidates. The five include two sitting Fed governors who were initially nominated to the central bank’s board by Trump: Christopher Waller and Michelle Bowman. Additionally, Kevin Hassett and Kevin Warsh are two more likely candidates. The former is the director of the White House National Economic Council, while the latter is a former Fed governor nominated by George W. Bush. Rick Rieder, a senior executive at BlackRock who oversees the firm’s massive bond business, rounds out the five-person list.
Warsh and Hassett have cultivated the closest relationships with Trump, which many Fed watchers believe is a crucial factor in Trump’s pick rather than qualifications and experience. Trump has previously said he considered Hassett, Waller, and Warsh for the job, although now Bowman and Rieder are two emerging candidates.
Why a New Fed Chair?
On multiple occasions, the Federal Reserve and Jerome Powell have been in hot water over handling Fed spending and interest rate cuts. Despite finally cutting rates this past month, Trump is adamant that the Fed needs to be completely gutted, starting with Chair Jerome Powell. Historically, the White House has announced a new chair around three to four months before the expiration of the sitting Fed leader’s term. However, a new appointee could join the Fed as soon as January, when the newest Fed member Stephen Miran’s term ends.
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The Fed is widely expected to cut rates by another quarter point at its two-day meeting that concludes Wednesday.