Former President Donald Trump is reportedly eyeing Treasury Secretary Scott Bessent as a potential replacement for Federal Reserve Chair Jerome Powell. According to multiple sources, including Bloomberg and Reuters, Trump’s dissatisfaction with Powell’s interest rate decisions is pushing him toward a leadership change at the U.S. central bank. If true, this move would signal a dramatic shift in how Trump plans to manage the nation’s monetary policy if he returns to office in 2025.
Why Trump Wants to Replace Powell
During his presidency, Trump frequently criticized Powell, calling him “Too Late Powell” for not cutting interest rates quickly enough. Powell’s term officially ends in May 2026, but Trump may act sooner if re-elected. The former president has openly suggested he might replace Powell for not aligning with his economic vision, particularly regarding rate cuts. This sets the stage for Scott Bessent, a longtime Trump ally and current Treasury Secretary, to possibly step into the role.
Who Is Scott Bessent?
Scott Bessent is a well-known figure in financial circles. He previously worked as Chief Investment Officer at Soros Fund Management. He later launched his own firm, Key Square Group. He now serves as Treasury Secretary. Bessent has been a close policy advisor to Trump. He reportedly aligns closely with Trump’s “America First” economic approach. Trump’s inner circle believes Bessent would support more aggressive interest rate cuts. They think this could help stimulate economic growth.
Market Reactions and Concerns Over Fed Independence
News that Trump eyes Bessent as next Fed Chair has sparked debates among economists and market analysts. Many are concerned that appointing a Treasury Secretary – a cabinet position under the president – to lead the Fed could compromise the central bank’s independence. Critics argue that such a move might erode investor confidence and increase political interference in monetary policy.
Trump allies argue that the Fed under Powell has been too slow. They believe it failed to address economic challenges effectively. They also say a new direction is needed. Bessent’s appointment would likely bring a pro-growth approach. He may support lower interest rates. This could appeal to markets in the short term. However, it might also increase inflationary risks.
Other Names in the Running
While Trump eyes Bessent as next Fed Chair, other candidates are still in consideration. These include former Fed Governor Kevin Warsh, economist Kevin Hassett, and former World Bank President David Malpass. Nonetheless, Bessent’s proximity to Trump and his Wall Street experience make him a front-runner.
What’s Next for the Federal Reserve?
Although no official announcement has been made, Trump is expected to finalize his decision before the 2026 expiration of Powell’s term, or possibly even before the 2024 presidential election to send a clear signal to the markets. If Bessent is appointed, it would mark one of the most politically charged nominations in recent Fed history.
