President suggests he's made his choice, sparking questions about what's in store for interest rates
President Trump said Tuesday he’ll name his pick to lead the Federal Reserve in early 2026 – and one contender appears to have shot ahead of the chasing pack as that announcement looms.
The process to find a replacement for Jerome Powell, whose term as Fed chair ends next year, has been led by treasury secretary Scott Bessent in consultation with Trump and commerce secretary Howard Lutnick, and reportedly involved around 10 candidates.
But that list has been whittled down to one, according to Trump, as speculation grows that his National Economic Council director Kevin Hassett is the president’s choice to helm the central bank.
Trump fueled those rumors at the White House on Tuesday afternoon, speaking at an announcement on investment accounts for children also attended by Hassett. “I guess a potential Fed chair is here too,” he said. “I don’t know. Are we allowed to say that? Potential?”
Separate candidates still in the fray – at least, officially
Other finalists for the role are still set for interviews this week with vice president JD Vance and senior White House staff, with no decision officially yet made.
Contenders include Fed governors Chris Waller and Michelle Bowman, BlackRock executive Rick Rieder, and former Fed governor Kevin Warsh.
Still, Trump’s comments gave the strongest clue yet that he’s already made up his mind about Hassett, a loyalist who would likely be expected to advocate for interest rate cuts and move the central bank sharply away from Jerome Powell’s careful approach.
Trump has frequently butted heads with Powell since returning to the White House in January, attacking the Fed chair – who assumed office in 2018, during Trump’s first term – for being “too late” and keeping rates too high.
That’s raised questions over whether the president plans to rein in the central bank and attempt to exert greater control over its decision-making process.
Trump has publicly and repeatedly toyed with attempting to fire Powell, reportedly writing a letter to dismiss the Fed chair in July and asking Republicans whether he should send it.
What’s in store for the Fed in 2026?
In an October interview with Politico, Hassett signaled his support for an independent and transparent Fed – but some observers have reacted to his potential appointment with unease.
The Center for Economic and Policy Research described Hassett as having shown “extraordinary obedience to Trump” this year and highlighted the potential chaos that could arise if the next Fed chair supports cutting rates to 1%, as Trump has proposed.
That’s not to say the next Fed chair will be able to bring rates lower at the drop of a hat. Interest rates are set by the Federal Open Market Committee (FOMC) – a group including the seven governors of the Federal Reserve Board, the president of the New York Fed, and four of the remaining 11 regional Fed presidents on a rotating basis.
Hassett would exert strong influence as Fed chair but would also have to build a majority on the committee, and there’s little indication that a consensus would develop around drastic rate cuts any time soon.
Powell wouldn’t be out the door immediately regardless of when Trump makes his announcement, with his term winding up in May. For now, that means all eyes are on the White House as market watchers await a decision with potentially big implications for interest rate outlook.
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