Treasury Secretary Scott Bessent confirmed on Monday that the Trump administration is evaluating 11 candidates to replace Federal Reserve Chair Jerome Powell, with interviews set to begin after Labor Day. The process, overseen by President Donald Trump and his economic team, aims to align the central bank with the administration's agenda, particularly favoring lower interest rates and regulatory overhaul.
Bessent described the candidates as "very strong" and stated the goal is to narrow the list to three or four finalists by fall. Powell's term expires in May 2026, and while Trump cannot remove him prematurely, the administration intends to install new leadership thereafter. This push follows years of tension over rate policy, notably when the Fed held rates at 4.25%–4.5% for a fifth consecutive meeting in July, triggering market volatility.
Prediction market PolyMarket assigns a 64% chance that Trump will announce Powell's replacement before year-end. Concurrently, traders are pricing in an 80% probability of a rate cut in September, bolstered by Powell's recent shift in tone at the Jackson Hole symposium, where he emphasized labor market risks over inflation concerns. Major banks like Morgan Stanley now forecast two rate cuts in 2025.
Critics, including Anthony Pompliano and Senator Elizabeth Warren, warn that politicizing Fed leadership could undermine its independence and destabilize markets. The FOMC meets on September 16–17, with high expectations for the first rate cut since 2020.