US Treasury Secretary Scott Bessent in an interview with Bloomberg suggested that Federal Reserve Chair Jerome Powell should leave the Fed board in May 2026. The comment comes after US President Donald Trump said that Bessent himself was a suitable replacement for Powell. However, he also said that the Treasury Secretary was not the leading candidate for the post.
‘Traditionally, the Fed Chair also steps down as..’
While speaking with Bloomberg, Bessent noted that, “Traditionally, the Fed chair also steps down as a governor.” He further put spotlight on the confusion that is being caused around new nominations. “There’s been a lot of talk of a shadow Fed chair causing confusion in advance of his or her nomination. And I can tell you, I think it’d be very confusing for the market for a former Fed chair to stay on also.”
However, Powell’s term as Fed governor is till January 2028, allowing him to legally be a part of monetary policy decisions at the central bank. In previous media interactions, though, Powell has refused to comment on his intentions to stay governor.
“There’s a formal process that’s already starting” with regard to identifying the nominee to become next Fed chair, Bessent also said. “There are a lot of good candidates inside and outside the Federal Reserve.”
When asked whether Trump has asked Bessent himself to serve as Fed chair, the Treasury chief said, “I am part of the decision-making process.” He noted that “it’s President Trump’s decision, and it will move at his speed.”
Trump on Fed Chief position
“He’s an option and he’s very good,” Trump told reporters as he commented on Bessent being Powell’s potential successor. Reiterating his claim he wasn’t on the top of the list, he said, “he’s not, because I like the job he’s doing,” said Trump, referring to Bessent.
Castigating Powell, Trump called out his renovations at the central bank and argued about the cost overruns. Calling them “disgraceful” and “fireable offense”, Trump condemned Powell’s presence as Fed Chief, as per a Bloomberg report.
“I think he’s a total stiff, but the one thing I didn’t see him as is the guy that needed a palace to live in,” Trump said, rallying his efforts to lower interest rates.
As the timeline progresses further, Bessent said last month that a new fed-chair name is likely to emerge in October or November. With lower interest rates in mind, Trump is likely to nominate someone who agrees with that. His constant opposition to Powell and the tariff frenzy, is likely to hike up rates further.