With rate cuts in mind for 2026, Treasury secretary names finalists to succeed Jerome Powell
The race to lead the Federal Reserve entered its final stretch this week, with Treasury secretary Scott Bessent confirming that the shortlist for the next chair has been narrowed to five candidates.
Speaking to reporters aboard Air Force One, Bessent said the finalists are current Fed governors Christopher Waller and Michelle Bowman, National Economic Council director Kevin Hassett, former Fed governor Kevin Warsh, and BlackRock executive Rick Rieder.
Bessent, who has overseen the interview process, said he is planning to do a second round of interviews and hope to present a good slate to President Trump after Thanksgiving.
President Donald Trump, meanwhile, told reporters he expects to announce a nominee to replace Jerome Powell before the end of the year, even though Powell’s term runs until May.
“We have a person who is not at all smart right now,” Trump said, referring to Powell.
Inside the selection process
The field was trimmed from 11 to five after a series of interviews, some lasting up to two hours, according to senior Treasury officials. The candidates bring a mix of regulatory, policy, and market expertise.
Bowman is recognized for her regulatory acumen, while Hassett’s background in economic policy stems from his White House tenure.
Warsh, who served during the financial crisis, is seen as a steady hand in turbulent times.
Rieder, the only candidate without Fed experience, has won praise for his market insight at BlackRock.
Bessent, once rumored as a contender himself, dismissed speculation he might leave Treasury for the Fed chair, reiterating his focus on delivering a strong candidate list.
Policy direction in the spotlight
The Federal Open Market Committee is set to meet this week, with markets widely expecting another rate cut. Waller, one of the finalists, has expressed support for further interest rate cuts.
“I want to move towards cutting rates, but you’re not going to do it aggressively and fast, in case you make a big mistake on which way that things go,” Waller said.
“I’m still in the belief we need to cut rates, but we need to kind of be cautious about it.”
US inflation ticked up in September, but First American’s Sam Williamson said the Federal Reserve is still poised to cut rates next week to bolster a softening labour market. https://t.co/Pm7KP3bcm2
— Mortgage Professional America Magazine (@MPAMagazineUS) October 24, 2025
He pointed to a labor market that appears to be losing jobs, even as the gross domestic product (GDP) growth remains strong and inflation stays above the Fed’s 2% target.
“Something’s got to give. Either the labor market rebounds to match the GDP growth, or that GDP growth is going to pull back. So whichever way that goes, it’s got to affect what you do with policy,” Waller said.
The Trump administration’s push for more aggressive rate cuts has raised questions about the Fed’s future direction. Should Powell step down, Trump would have the opportunity to appoint a fourth governor, potentially reshaping the board’s policy outlook.
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