Who is the next chairman of the Federal Reserve? "Reproposing" Bostic, is Trump "joking" or "laying a trap"?

Speculation surrounding the next Federal Reserve Chair has been reignited by recent comments from U.S. President Donald Trump.

According to the latest media reports, Trump stated to business leaders during his visit to Japan this Tuesday that he is "considering" current Treasury Secretary Mnuchin for the position of Federal Reserve Chair. Trump praised Mnuchin's ability to "calm" financial markets, contrasting it with his own sometimes "disruptive" style.

Trump did not hide his admiration for Mnuchin's market communication skills during his speech. He stated: "How well does he perform on television? He can calm the markets, I can't calm the markets, I sometimes disrupt the markets."

Despite Mnuchin having publicly expressed no intention to take the position and currently being responsible for the selection process, his name continues to be mentioned repeatedly. Whether Trump's seemingly impromptu nomination was a deliberate probe or an offhand comment, it has kept the suspense around the final candidate alive.

Within the Trump administration, Mnuchin has been viewed as a "constraint" on the president, in stark contrast to Trump's attitude towards Powell. Trump has referred to Powell as a "moron" and has repeatedly threatened to fire him. Such direct attacks on Federal Reserve officials have raised widespread concerns in the market about the independence of the central bank.

Therefore, Trump's emphasis on Mnuchin's "calmer" role reveals his expectations for the next Federal Reserve Chair to possess qualities that can both implement his desired policies and effectively manage market sentiment.

However, this statement quickly took a turn. Trump subsequently added that Mnuchin would not accept the job because "he likes to stay at the Treasury." He then seemed to completely overturn his earlier statement, saying "We're not really considering him."

This series of contradictory remarks occurs against the backdrop of Mnuchin himself leading the search for Powell's successor, making it even more nuanced.

Selection Enters Critical Phase, Five-Person Shortlist Emerges

The search for Powell's successor has entered a critical stage. Powell's term will end in May 2026, and the selection process led by Mnuchin has been ongoing for several weeks.

An article from Wall Street Insight mentioned that the current candidate list has been narrowed down to five individuals, including Federal Reserve Governors Waller and Bowman, Trump's economic advisor Hassett, BlackRock strategist Rick Rieder, and former Federal Reserve Governor Warsh.

It is widely expected that Trump will make a final decision between Thanksgiving at the end of November and Christmas at the end of December.

Early Intervention in Decision-Making? The "New Federal Reserve Chair" is Likely to Participate in Interest Rate Decisions in March and April Next Year

An article from Wall Street Insight stated that Trump is accelerating the process of selecting the next Federal Reserve Chair, planning to finalize the candidate by the end of this year This unconventional timeline may allow the White House to exert influence on monetary policy earlier.

According to "The New Fed Correspondent" Nick Timiraos, the new chairperson is likely to fill the board seat currently held by Milan, which would enable Trump to arrange for this future chair to participate in the rate-setting meetings in March and April before the new chair's term officially begins in mid-May next year, allowing the new chair to start influencing the direction of monetary policy before formally taking charge of the Federal Reserve.

Policy Outlook Amid Calls for Rate Cuts

Whoever ultimately leads the Federal Reserve will face a policy environment filled with calls for rate cuts.

The Federal Reserve cut rates by 25 basis points in September this year due to signs of a weakening labor market, and the market expects officials to approve another cut of the same magnitude this Wednesday, bringing the target range for the federal funds rate down to 3.75%-4%.

Notably, not only Trump but also his allies and even Bessenet himself have been advocates for rate cuts. Milan, the new Fed governor and an ally of Trump, was the only member to vote in favor of a 50 basis point cut last month and believes that rates need to be lowered by another 125 basis points by the end of the year.

Bessenet himself also stated before the Fed's rate cut in August this year that borrowing costs need to be reduced by 150 basis points