According to CCTV News, on October 28 local time, CCTV reporters learned that US President Trump said that Federal Reserve Chairman Powell was "incompetent" and that his term would end in May next year, at which time a new person would be selected.
Trump said, "We have an incompetent head of the Federal Reserve, but he will leave in a few months and we will replace him with someone new."
Federal Reserve Chairman Jerome Powell's term will end in May 2026. Trump has repeatedly called for the Fed to cut interest rates significantly and demanded Powell's resignation.
Currently, it is widely expected that the Federal Reserve will announce a 25 basis point cut in the federal funds rate at its two-day policy meeting concluding on October 29. This would be the Fed's second consecutive rate cut. Trump had previously stated his desire for the Fed to cut rates by 300 basis points. Analysts say the selection of the new chairman is crucial, as it will directly impact the future direction of US monetary policy and the central bank's independence.
On the 27th local time, U.S. Treasury Secretary Bessant revealed that the shortlist for Federal Reserve Chair has been narrowed down to five candidates: current Federal Reserve Board members Christopher Waller and Michelle Bowman, former Federal Reserve Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and BlackRock. Executive Rick Reid. The five-person list includes veterans from within the Federal Reserve, the White House, and Wall Street.
Bessant stated that he plans to begin a new round of interviews and submit a "list of high-quality candidates" to President Trump by the end of November. Trump himself has also indicated that he expects to finalize his nominee by the end of the year.
Some analysts suggest that Trump's desire to make a decision before the end of the year may reflect some thorny factors surrounding Powell's position. Powell's term as chairman ends next May, but he is likely to remain on the Federal Reserve Board as one of seven governors until January 2028. This would deprive Trump of the opportunity to nominate another governor for the next few years.
Under the Federal Reserve Act, the Chair of the Federal Reserve is nominated by the President and must be selected from among the members of the Federal Reserve Board of Governors, with the nomination requiring Senate confirmation. If the President wants someone to serve as Chair of the Federal Reserve, they typically need to first become a member of the Federal Reserve Board of Governors.
Of the five candidates, Warsh and Hassett are considered frontrunners, both having close ties to Trump. Trump has publicly stated that he likes both Kevins very much.
Hassett is the nominee with the closest ties to Trump, having served in senior White House positions during both of Trump's terms and previously worked at Jared Kushner's private equity firm. For someone like Trump who highly values loyalty, he is an attractive option. However, the market generally believes that if Hassett becomes Federal Reserve Chairman, the Fed will struggle to maintain its independence from the White House. Hassett would have little room to maneuver in the event of a crisis or soaring inflation, further threatening the Fed's independence.
Warsh served as a Federal Reserve governor during the 2008 global financial crisis. He criticized the Fed for deviating from its price stability mandate, engaging in excessive quantitative easing during non-crisis periods, fostering fiscal irresponsibility, and undermining its independence. This stance pleased Trump.
Waller, appointed by Trump in 2020, is a current Federal Reserve governor who likely fits Trump's expectations for a "central figure" candidate. His advantage lies in his deep understanding of how the Federal Reserve operates and how reforms should be tailored to the Trump administration's preferences.
Before joining the Federal Reserve, Bowman worked at the Kansas State Bank . Commissioner. She has consistently attacked the "conventional wisdom" within the Federal Reserve and opposed many of the regulatory measures implemented during the Biden era, which may appeal to Trump, who seeks comprehensive reforms of the Fed.
Reid is a prominent figure on Wall Street with in-depth knowledge of the fixed-income market, which is heavily reliant on Federal Reserve policy. He is familiar with the markets but not with the Fed's internal bureaucracy, leading some to believe he can bring a "truly new perspective" to the Fed.
(Source: Daily Economic News)
