U.S. President Donald Trump has revealed that he believes he has identified his preferred candidate to replace Federal Reserve Chair Jerome Powell when Powell’s term ends next year. Current market predictions show that National Economic Adviser Kevin Hassett is the leading contender, with traders giving him a 47% chance of being nominated.
Trump Signals Confidence in His Pick
During a bilateral meeting with the Crown Prince of Saudi Arabia, Trump stated that he thinks he already knows who he wants to lead the Federal Reserve. He confirmed that he has begun interviewing candidates for the role. The president also remarked that he would fire Powell immediately if he could, highlighting ongoing tensions between the two.
Trump has repeatedly criticized Powell for not cutting interest rates sooner. The Federal Open Market Committee eventually delivered two rate cuts in September and October. Trump responded by saying the central bank had moved beyond what he called “Powell’s interest rate stupidity.” Although Powell’s term as chair ends in May next year, Trump can announce his replacement at any time.
How the Transition Could Unfold
Reports indicate that Trump may first appoint Powell’s successor as a Fed governor to fill Stephen Miran’s seat when his term expires in January. That nominee would then take over the chair position once Powell’s term ends in May 2026.
Previously, U.S. Treasury Secretary Scott Bessent shortlisted five potential candidates: Fed Governors Christopher Waller and Michelle Bowman, Kevin Warsh, Kevin Hassett, and BlackRock CIO Rick Rieder.
Hassett Leads the Race
Data from Polymarket shows Kevin Hassett as the current frontrunner to become the next Fed chair. He holds a 47% probability of being selected. Waller follows with 21%, while Rieder and Warsh hold 11.6% and 11% odds, respectively.
Hassett has already expressed interest in the position, saying he would accept the role if nominated. He also pointed to his background at the Federal Reserve, where he worked for five years.
As for monetary policy, the National Economic Council Director favors a larger rate cut at the upcoming December FOMC meeting, though he predicts the Fed will likely reduce rates by only 25 basis points. According to recent reports, a December rate cut remains uncertain, as several Fed officials warn against easing too quickly due to renewed inflation pressures.
