President Donald Trump will begin final interviews for Fed chair candidates this week, putting the formal selection process that began this summer back on track.
“We’re going to look at a few different people, but we have a pretty good idea of who we want,” Trump told reporters aboard Air Force One Tuesday night.
The meeting between President Trump and Treasury Secretary Scott Bessent will begin on Wednesday with former Federal Reserve Director Kevin Warsh and will include National Economic Council Director Kevin Hassett at some point, two people familiar with the matter said. The process, which had been slightly derailed last week when interviews with candidates were abruptly canceled, is restarting.
National Economic Council Director Kevin Hassett (left) and former US Federal Reserve President Kevin Warsh.
Reuters
President Trump recently said he knew who he would choose to replace current Chairman Jerome Powell, but prediction markets overwhelmingly believed Hassett would be the choice. But his potential pick has recently sparked a backlash from markets, especially bond investors, who fear that Mr. Hassett will simply do Mr. Trump’s bidding and keep interest rates too low even if inflation recovers quickly.
So it’s unclear whether these interviews are a sign that Trump has changed his mind, or whether they are just the final step in a formal process.
CNBC first reported in October that President Trump had narrowed his list of candidates to five. Four of these five will participate in the final interview. The group also includes current governors Christopher Waller and Michelle Bowman, as well as Rick Rieder, BlackRock’s head of fixed income.
The Fed is likely to cut interest rates for the third time this year on Wednesday, but Powell, whose term as chair expires in May, is expected to strike a cautious tone about the extent of next year’s rate cuts in his post-meeting press conference. The Fed’s latest outlook, released in September, called for just one rate cut next year.
Powell’s hawkish tone on Wednesday could further irritate President Trump, who is trying to reshape the Fed in a way that favors a low interest rate regime. In an interview with Politico published Tuesday, President Trump reiterated that he intends to put a litmus test on candidates’ appetite for further rate cuts.
Warsh declined to comment to CNBC.
