Treasury Secretary Scott Bessent disclosed that the White House will begin conducting interviews this fall to find a successor for Federal Reserve Chair Jerome Powell, who is scheduled to end his term in May 2026. This timeline gives the Trump administration approximately six months to find a replacement for Powell. Details regarding the selection process were not shared by Bessent during his conversation with Bloomberg TV in Argentina.
President Trump has consistently advocated for lower interest rates and has urged Powell to take action. On April 4, the president made a public statement on Truth Social, instructing Powell to “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!” Despite Trump’s repeated pressure on the Fed, Bessent expressed that he is not concerned about Trump potentially removing Powell from his position or interfering with the Fed’s independence. However, he did acknowledge the need for a broader discussion regarding the Fed’s role as a regulatory authority.
Bessent emphasized the importance of maintaining the balance between the Fed’s dual duties, specifically focusing on monetary policy and regulatory functions. He highlighted that the Fed is just one of three bank regulators, alongside the Comptroller of the Currency and the FDIC. Bessent suggested that there is room for a more detailed discussion on the differentiation of responsibilities among these regulatory bodies to ensure effective governance.
While acknowledging that he regularly meets with Powell for breakfast to discuss various matters, Bessent shared that there have not been talks about contingency plans in case financial stability risks escalate. He mentioned that it is premature to consider such extreme measures, stating that they are currently far from needing to implement emergency measures. Bessent reported that he recently met with Powell at the Federal Reserve and found no major concerns related to recent developments in bond markets. He indicated that Powell did not express any specific worries, suggesting that everything was proceeding as usual during their interaction.
Overall, Bessent’s comments shed light on the upcoming transition in Fed leadership and the administration’s plans to conduct interviews for Powell’s replacement. Despite Trump’s public calls for interest rate cuts, the Treasury Secretary remains confident in the independence of the Fed and downplays concerns about political interference. Bessent also underscores the need for a clearer distinction between the Fed’s monetary policy and regulatory responsibilities, proposing a more nuanced discussion among the various banking regulators. As conversations continue between Bessent and Powell, the focus remains on maintaining stability and addressing potential risks in the financial markets.
