After months of anticipation and political maneuvering, President Donald Trump is nearing the selection of the next chair of the Federal Reserve, according to Treasury Secretary Scott Bessent. He made this revelation on Tuesday during an interview with CNBC at the World Economic Forum in Davos, Switzerland.
"My guess is the president will reach a decision maybe as soon as next week," Bessent indicated during the "Squawk Box" segment. "We've engaged in substantial discussions about this. Our selection process kicked off in September with 11 strong candidates, and we are now down to four. The president has personally met all of them, and it will be his final decision."
While Bessent did not disclose the names of the four finalists, past comments suggest the frontrunners include National Economic Council director Kevin Hassett, former Fed Governor Kevin Warsh, current Governors Christopher Waller and Michelle Bowman, as well as BlackRock's chief fixed income strategist, Rick Rieder.
Prediction markets have increasingly focused on Hassett, Warsh, and Waller; however, White House officials have noted Rieder's meeting with Trump and his growing consideration. Recently, Warsh emerged as the frontrunner on Kalshi, with Rieder and Waller following, partly due to Trump's preference for keeping Hassett in his current role.
Bessent, who has overseen the selection process, has maintained impartiality without revealing a personal choice.
White House critiques, including those from Trump and the Treasury secretary, have targeted Powell for his monetary policy management, interest rate decisions, and overall leadership of the institution. These tensions have recently escalated with the Justice Department's subpoena of Powell concerning a renovation project at the Fed headquarters.
Trump initially nominated Powell in 2017, and he was reappointed by former President Joe Biden.
"The Fed's monetary policy independence is crucial," Bessent noted. "However, various issues were impacting this independence. During Powell's tenure, around four to six governors and presidents have resigned due to ethical breaches. In a Wall Street firm scenario, the CEO would face termination."
Ethical breaches have led to several Fed officials, including Governor Adriana Kugler, retiring or resigning for violating investment guidelines.
"Independence doesn't equate to a lack of accountability. The Fed holds a unique responsibility to the American people as it significantly influences their lives," Bessent emphasized.
Although Powell's term as chair concludes in May, he retains the option of remaining as governor until 2028.