Who Will Replace Jerome Powell? Trump Set to Interview Final Fed Chair Candidates

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The search for the next Federal Reserve chair is entering its final stage, and Washington is bracing for a major shift. With Jerome Powell’s term ending in May, President Donald Trump is preparing to begin the last round of interviews this week, signaling that a decision is coming soon.

According to the Financial Times, Trump and Treasury Secretary Scott Bessent will meet former Fed governor Kevin Warsh on Wednesday. However, administration officials say National Economic Council director Kevin Hassett remains the frontrunner, and his potential appointment is raising eyebrows across financial markets.

Hassett Emerges as the Leading Candidate

Hassett is the strongest contender largely because he aligns closely with Trump’s long-standing demand for sharply lower interest rates. Powell has resisted aggressive cuts, drawing months of criticism from the president. Hassett, by contrast, has openly supported Trump’s approach, even endorsing a 50-basis-point cut in December, double the size of the Fed’s recent moves.

Still, Hassett insists he can run an independent, data-driven Fed. In recent interviews, he pushed back on claims that he would simply follow Trump’s lead. But investors remain cautious. Analysts warn that a Hassett appointment could be viewed as a political reshaping of the traditionally independent central bank.

Who Else Is in the Running?

In addition to Hassett and Warsh, three other candidates remain under consideration: Fed Governors Christopher Waller and Michelle Bowman, and BlackRock executive Rick Rieder. All five candidates share some level of support for lower rates, reflecting the pressure created by Trump’s trade policies and tariff-driven economic uncertainty.

The final decision is expected before year-end, with Bessent leading the interview and vetting process. Trump has made clear he expects the Fed to change direction, and soon.

What About the Fed Rate Cut?

After cutting rates twice this fall, and by a total of 1.5% over the past 15 months, the Fed is getting closer to a level that could actually stimulate the economy, which many officials want to avoid. Some Fed members already think rates are “neutral,” meaning they’re neither helping nor hurting growth. These mixed opinions on how restrictive the policy really is could lead to another divided vote, with some analysts expecting up to three officials to disagree.

Most Fed watchers expect the Fed to cut rates again, for the third time in a row, when the final 2025 meeting ends on Dec. 10. But a December cut isn’t guaranteed. Chair Jerome Powell made it clear after the last meeting that people hoping for quick relief from high prices shouldn’t assume another cut is certain.