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A “formal process” to select the next chair of the US Federal Reserve has begun, according to Treasury secretary Scott Bessent, as the White House’s frustration with the central bank’s reluctance to cut interest rates grows.
Bessent said on Tuesday that a search was already under way to find a replacement for Jay Powell, whose term ends next May, even as he insisted that Donald Trump did not intend to fire the Fed chair.
“There’s a formal process that’s already starting,” Bessent told Bloomberg Television. “There are a lot of great candidates. And we’ll see how rapidly it progresses. It’s President Trump’s decision and it will move at his speed.”
The Treasury secretary’s comments come as Trump piles pressure on Powell — who he described as a “stubborn mule” and “numbskull” — to lower rates in order to reduce US debt payments.
The Fed chair has said any decision to reduce borrowing costs will depend on economic data. Official figures released on Tuesday showed Trump’s sweeping tariffs were putting upward pressure on prices, prompting traders to cut back bets on a near-term rate cut.
Powell is due to stand down as Fed chair in May 2026, but he can stay on as a governor at the central bank until 2028.
Bessent suggested that Powell should leave the board altogether, warning that not doing so could lead to “confusion” in markets.
“Traditionally the Fed chair also steps down as governor,” he said.
“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 would be very confusing for the market for a former Fed chair to stay on also.”
Trump’s repeated attacks on Powell, and his insistence that he will only pick a new chair who cuts interest rates, has raised concerns on Wall Street over the central bank’s continued independence.
“The independence of the Fed is absolutely critical — and not just for the current Fed chair, whom I respect, Jay Powell, but for the next Fed chair,” said Jamie Dimon, JPMorgan chief executive, on Tuesday.
“Playing around with the Fed can often have adverse consequences, the absolute opposite of what you might be hoping for,” he added.
Kevin Hassett, director of the National Economic Council, who is seen as a contender to be the next Fed chair, said over the weekend that sacking Powell was “being looked into”.
But Bessent insisted that Trump did not intend to fire Powell.
“President Trump’s said numerous times he is not going to fire Jay Powell,” said Bessent, adding: “I think an independent central bank is very important for the conduct of monetary policy.”
