Powell's successor enters the final review list, Trump says a decision will be made by the end of the year
U.S. Treasury Secretary Becerra confirmed that five candidates have made it to the final list for the Federal Reserve Chair, with President Trump expected to make a decision by the end of the year. The candidates include current Fed Governor Christopher Waller, among others. The market widely expects the Federal Reserve to cut rates by another 25 basis points at the meeting on October 29. Trump hopes for a one-time rate cut of 300 basis points, and the new chair will need to balance political pressure with market confidence. Powell's term will expire in May next year, but he has not yet indicated whether he will step down
According to the Zhitong Finance APP, on Monday, U.S. Treasury Secretary Mnuchin confirmed that five candidates have made it to the final list for the Federal Reserve Chair position, and President Trump indicated that he expects to make a final decision by the end of the year.
In an interview with reporters aboard Air Force One, Mnuchin stated that the candidates include current Fed Governor Christopher Waller, Michelle Bowman, former Fed Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and BlackRock executive Rick Rieder.
The market widely expects that the Federal Reserve will cut interest rates by another 25 basis points at the two-day monetary policy meeting ending on October 29, marking the second consecutive rate cut. Before the policy re-enters a rate-cutting cycle, Trump has expressed a desire for the Fed to cut rates by 300 basis points in one go. Trump also emphasized that he does not believe Mnuchin will leave to take over the Fed.
Balancing political pressure and market confidence will be a core challenge for the new chair, as they must respond to Trump's demand for low interest rates while maintaining investor confidence and the credibility of the monetary authority.
Powell's term as chair will expire in May next year, but his term as a Fed governor extends until early 2028. He has not indicated whether he will leave after his term as chair ends. If he stays on, he may continue to exert potential influence within the Federal Open Market Committee (FOMC) during the new chair's tenure.
Currently, the FOMC is in a dilemma; on one hand, employment has sharply cooled in the summer, raising concerns about rising unemployment, prompting a 25 basis point rate cut in September, with another cut possibly this week; on the other hand, many decision-makers remain concerned that inflation levels are still nearly one percentage point above the 2% target, while strong economic growth in the third quarter has made some members wary of premature or excessive easing. The outlook for U.S. monetary policy remains fraught with divisions and uncertainties
