Trump’s Fed chair candidates list narrowed down to five by Bessent after interviews, sources say
After a series of difficult negotiations, some lasting as much as two hours, Treasury Secretary Scott Bessent narrowed the list of candidates for Federal Reserve chair from 11 to five, who could be nominated to lead the Fed (though not necessarily be chair) by January.
The remaining list of candidates includes two Fed officials (Vice Chairman for Supervision Michelle Bowman and Gov. Christopher Waller), National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh and BlackRock Fixed Income CIO Rick Rieder, according to senior Treasury officials.
Treasury plans to hold a new round of interviews with all five candidates in the coming weeks and months. The talks will be led by Bessent and will include two senior Treasury officials and two senior White House officials.
With Bessent focused on next week’s World Bank/IMF meetings in Washington and then heading to Asia for an extended trip with President Donald Trump, the meeting process may not be completed until after Thanksgiving, officials said.
The secretary plans to send a smaller list to Trump, who will then make the final decision. However, it is likely that this person will be nominated first as Fed Governor and then as Fed President.
This is because Fed Chairman Jerome Powell, whose term ends in May, has only two years remaining in the governor’s chair. The term of former Fed Governor Adriana Kugler’s seat, currently occupied by Stephen Miran, will expire in January, allowing the new Fed chair to be nominated for a seat with a 14-year governor’s tenure.
However, officials said the strategy has not been decided and other possibilities exist.
The president has already named Warsh, Hassett and Waller as finalists for the job, so only Rieder and Bowman will make new recommendations to the White House.
Rick Rieder, BlackRock’s chief investment officer of global fixed income, speaks at the Delivering Alpha conference in New York City on September 28, 2023.
Adam Jeffery | CNBC
Compared to previous administrations, the Trump administration is running a more open process for the next Fed chair, announcing candidates as the list grows and shrinks.
At the same time, the administration, led by the president himself, has been highly critical of Fed policy and has repeatedly called on the Fed to sharply lower interest rates. The president had threatened to fire Powell and actually fired Fed Governor Lisa Cook over alleged mortgage fraud, charges she denies.
Cook’s removal was blocked by lower courts and the case will be heard by the Supreme Court in January. Attempts to oust Cook have raised concerns about the administration’s commitment to the Fed’s independence, raising the risks of appointing a new chairman and making it a closely watched decision.
BlackRock’s Rieder is impressive
Treasury officials also offered some insight for the first time into Bessent’s thoughts on the criteria used to decide who gets elected to office.
Bessent is said to be looking for someone with experience in economics, monetary policy, banking regulation and management who is open to new ideas about how to run the Fed and monetary policy.
The Secretary recently wrote an op-ed harshly criticizing the Fed and calling for a review of the Fed’s policy, structure, and mission.
Among his criticisms was that the Fed had become too big and had lost its mission. This suggests that he would prefer a candidate who is willing to both reduce the size of the Fed and roll back the use of some tools, especially quantitative easing.
Officials said neither candidate was the frontrunner but confirmed recent reports that Rieder was influencing Bessent.
Rieder, a frequent guest on CNBC, has been a well-known fixture on Wall Street for years. His analyzes of the fixed income market and the Fed are widely read. He also runs a large department at BlackRock. Although not decisive, officials suggested that the fact that Rieder, who is alone among the five remaining candidates, has never worked at the Fed may be a plus.
