President Donald Trump just sent shockwaves through economic circles by axing Treasury Secretary Scott Bessent from the running for the role of Federal Reserve chair, as the New York Post reports. His decision, aired on CNBC’s Squawk Box, signals a bold shift in picking the next leader to replace Jerome Powell, whose term ends in May 2026. The move underscores Trump’s knack for shaking up expectations while keeping his economic vision front and center.
Trump confirmed Bessent’s removal from consideration, revealing he has four finalists in mind to helm the Fed. This follows weeks of speculation that Bessent, a key Treasury figure, was a frontrunner to succeed Powell. The president’s pivot away from Bessent highlights his demand for loyalty and alignment on monetary policy.
“I love Scott, but he wants to stay where he is,” Trump told CNBC, praising Bessent’s commitment to his current role. Nice words, but they mask a deeper truth: Bessent’s refusal to jump ship for the Fed likely reflects a clash of ambition or strategy. Trump’s admiration sounds more like a polite send-off than a genuine endorsement.
Trump named National Economic Council Director Kevin Hassett and former Fed Governor Kevin Warsh as potential Fed Chair candidates. Two other unnamed contenders are also in the mix, keeping the selection process shrouded in mystery. This lineup suggests Trump wants a Fed leader who’ll dance to his economic tune, not Powell’s.
Warsh, who served on the Fed’s Board from 2006 to 2011, brings experience but was previously overlooked by Trump for Powell. Hassett, content at the National Economic Council, called it the “best job in the world” on NBC’s Meet the Press. Their inclusion shows Trump’s eyeing seasoned players, but their willingness to take the job remains unclear.
“Both Kevin Warsh and Kevin Hassett are very good candidates,” Trump declared. Yet, his praise feels like a calculated nod to keep markets calm while he shops for a Powell replacement. The real question is whether Warsh or Hassett can stomach Trump’s aggressive push for lower interest rates.
Trump’s disdain for Powell’s high-interest rate stance is no secret. He’s blasted Powell as “too late” and “highly political,” arguing the Fed’s 4.25% to 4.5% benchmark rate stifles economic growth. Trump believes these policies complicate refinancing $9 trillion in U.S. debt, a point he’s hammered relentlessly.
Powell, unmoved, has vowed not to resign despite Trump’s barbs. Some economists back Powell, noting inflation still hovers above the Fed’s 2% target. Trump’s criticism, though, paints Powell as a bureaucratic roadblock to his vision of a booming economy.
“It’s not what I want,” Trump snapped, slamming Powell’s timing on rate decisions. His frustration reeks of a president itching to steer the Fed himself. But with legal experts questioning his power to oust Powell, Trump’s stuck waiting until 2026.
A dismal July jobs report, showing just 73,000 jobs added, fueled Trump’s ire. Revised figures also slashed May and June job counts by 258,000, painting a bleaker economic picture. Trump’s swift dismissal of Bureau of Labor Statistics Commissioner Erika McEntarfer suggests to some that he is blaming the messenger for bad news.
Trump accused McEntarfer of fudging jobs data, a charge that reeks of political theater. While his base cheers the move, it sidesteps the real issue: a softening labor market that needs more than scapegoats. The weak report amplifies Trump’s push for a Fed chair who’ll slash rates to juice growth.
The president's refusal to fire Powell before his term ends shows rare restraint. Legal hurdles likely forced his hand, as critics argue the president lacks the authority to sack the Fed chair. This standoff keeps Powell in place, for now, as Trump plots his next move.
Trump’s CNBC quip about CNBC anchors being “very qualified” for the Fed was classic showmanship. “You guys are better than most of the people that do it for a living,” he teased. Beneath the jest lies a jab at the Fed’s ivory tower, which Trump sees as out of touch with everyday Americans.
The Federal Open Market Committee’s decision to hold rates steady last week further irks Trump. He views Powell’s cautious approach as a drag on economic recovery, especially with debt refinancing looming. His next Fed chair pick will likely prioritize rate cuts over inflation dogma.
Trump’s hunt for a new Fed chair is more than a personnel shuffle; it’s a battle for economic control. With Bessent out and Powell on notice, Trump is signaling he wants a Fed that bends to his will. Come May 2026, expect a seismic shift in monetary policy -- or a fierce fight if Powell’s legacy lingers.
