The current central bank chair’s term ends in May.
Potential candidate interviews for the post of the new Federal Reserve chairman will be happening soon, Treasury Secretary Scott Bessent said in an Aug. 19 interview with CNBC.
“In terms of the interview process, we’ve announced 11 very strong candidates. I’m gonna be meeting with them probably right before/right after Labor Day, and to start bringing down the list to present to President [Donald] Trump,” Bessent said, without providing any more details on the list. This year, Labor Day falls on Sept. 1.
“And it’s an incredible group. It’s people who are at the Fed now, have been at the Fed, and private sector. So I’m looking forward to meeting all of them with a very open mind.” The Fed chair is nominated by the president for a four-year term and must be confirmed by the Senate.
The term of the current Fed chair, Jerome Powell, is set to expire in May 2026.
Talking about the Federal Reserve’s high interest rates, Bessent said they were seeing “some distributional aspects to the higher rates,” especially in housing and lower-income households with high credit card debt. On one side, there is a boom in capital expenditure, while on the other hand, households and home building are struggling, he said.
“If we keep constraining home building, then what kind of inflation does that create one or two years out? So, you know, a cut here could facilitate a boom or a pickup in home building, which will keep prices down one, two years down the road,” he said.
The Treasury Secretary was asked whether the producer price index (PPI) inflation number for July, published last week, suggests it was the right time to cut 50 or at least 25 points from the Fed’s interest rate.
PPI measures prices paid by businesses for goods and services. In July, the index rose by 3.3 percent year-over-year after remaining below the 3 percent level for the previous three months.
Bessent dismissed the PPI increase, highlighting that since Trump first came to office, there have been five “very tame” PPI figures. A major component of July’s PPI number was investment services, “which just means the market went up a lot,” he said.
The Treasury Secretary’s comments on interviewing Fed chair candidates come as multiple names have been rumored to take over as Powell’s successor, including former Fed governor Kevin Warsh, current Fed board member Christopher Waller, and director of the National Economic Council Kevin Hassett.
Trump has been at odds with Powell over the issue of rate cuts. The president has pushed for lowering interest rates to bring down borrowing costs and trigger growth.
However, Powell has maintained that rates would only be cut once the central bank is convinced inflation would not rise due to Washington’s tariff policies.
Last month, Bessent said the formal process for selecting a new Fed chair was underway and clarified that Trump has no intention to remove Powell prior to the end of his term in May despite the differences in opinion.
On July 25, Trump said he may appoint a new Fed chair based on the candidate’s willingness to lower rates.
