The Timeline

Treasury Secretary Scott Bessent said Tuesday he expects President Trump to make a decision on the new Federal Reserve chair by the holiday season.

"I think there's a very good chance that the president will make an announcement before Christmas," he said. "But it's his prerogative, whether it's before the Christmas holidays or in the new year. But I think things are moving along very well."

Bessent has been heading the search for a successor to current Chair Jerome Powell.

The Candidates

Bessent said he still has one interview to go and was not ready to speculate on who might get the job.

The slate of finalists is believed to include National Economic Council Director Kevin Hassett, former Governor Kevin Warsh, BlackRock executive Rick Rieder, and current Fed Governors Christopher Waller and Michelle Bowman.

Trump's Pressure

Trump has been a fierce Fed critic. He recently said he'd "love" to fire Powell and encouraged Bessent to "work on" the chair to get the central bank to lower its key interest rate.

Referring to Bessent, Trump even joked that "if you don't get it fixed fast, I'm gonna fire your ass."

"If you were in the room, he was joking," Bessent said. "We've gotten to this point where monetary policy has gotten very complicated, and it's more than just cutting rates."

Powell's Remaining Time

Powell's term expires in May 2026. Before then, he's expected to have his hands full with a suddenly divided Federal Open Market Committee.

The committee is split over the need for further cuts. Markets largely expect the FOMC to approve a third consecutive cut at the December meeting based on a recent statement from New York Fed President John Williams.

Bessent's Vision

Bessent envisions a different role for the Fed from the dominating position it has had since the financial crisis.

"I think we've got to kind of simplify things," he said. "I think it's time for the Fed just to move back into the background, like, it used to do, calm things down and work for the American people."

The Bottom Line

Treasury Secretary Bessent expects Trump to name Powell's replacement before Christmas from a slate including Hassett, Warsh, Rieder, Waller, and Bowman, as the president pushes for a Fed chair who will cut rates despite Powell's term not expiring until May 2026.