The Main Event: Why Bessent is Out

During a morning interview with CNBC, President Trump confirmed that his administration’s search for a new Federal Reserve chairman would not include Scott Bessent. Trump explained that he had a conversation with Bessent the previous night, where the Treasury Secretary made it clear that he was not interested in the role.

“I love Scott, but he wants to stay where he is,” Trump said in the interview. “I’ll take him off, because I asked him just last night, ‘Is this something you want? Nope, I want to stay where I am.'”

This statement clarifies the situation surrounding Bessent, who had been a prominent name in the media’s speculation about who might replace Jerome Powell. Bessent’s decision to remain at the Treasury Department suggests his commitment to the administration’s fiscal policies and ongoing economic initiatives, rather than a move to the nation’s central bank. This is a significant development, as it removes one of the most talked-about contenders from the field and narrows the focus for investors and policy watchers. The news was first reported by Politico and other major outlets.

The Shortlist: Who’s Still in the Running? – Treasury Secretary Scott Bessent

With Scott Bessent now out of the picture, President Trump indicated that his list of potential candidates has been narrowed down to four people. He specifically named two of the remaining contenders: former Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett.

Both Warsh and Hassett have long been seen as strong candidates. Warsh, who served on the Fed’s board from 2006 to 2011, is known for his hawkish views on inflation and his desire for more transparent Fed communication. Hassett, a key economic advisor to Trump, has consistently advocated for lower interest rates and has been a public critic of current Fed policy. Trump praised both men in his interview, stating, “Both Kevins are very good, and I have two other people that are doing well.”

The identities of the other two candidates remain a mystery, though speculation will likely continue in the coming days. The president’s comments suggest a deliberate and careful process is underway to select a new leader for the central bank who aligns more closely with his economic vision, particularly regarding interest rates.

The Bigger Picture: Trump’s Stance on the Fed

President Trump has a long-standing and well-documented tension with the Federal Reserve, particularly with its current chairman, Jerome Powell. Trump has often been critical of what he views as the central bank’s overly cautious approach to monetary policy and its failure to lower interest rates more aggressively. The president has made it clear that he is looking for a leader who will prioritize a more expansionary economic policy.

The fact that Trump’s two named candidates, Kevin Warsh and Kevin Hassett, both have a history of favoring lower rates and challenging the Fed’s independence, points to the direction Trump wants the central bank to go. The removal of Scott Bessent from the running, who has been a steady and highly regarded figure in the Treasury, is a strong signal that the president is looking for a specific type of candidate to lead the institution. This selection will have major implications not just for U.S. economic policy but also for global markets.

What Happens Now? The Path to a New Chair

Jerome Powell’s term as Fed chair officially expires next May, but the political maneuvering for his replacement has clearly begun. Trump’s announcement about Scott Bessent and the shrinking list of candidates marks a key step in this process. However, the path to a new Fed chair is not just about the top job.

Trump also mentioned in his CNBC interview that he is preparing to announce a new Fed governor to fill the vacancy left by Adriana Kugler. He noted that this appointment would be for a short, four-month term, but he hinted that this individual could also be a future contender for the Fed chair position. This suggests that the administration may be using the governor role as a sort of “audition” for the more powerful chair position. All eyes will now be on who Trump chooses for this temporary role, as it could provide more clues about his final selection for the nation’s top central banker.