Who will be the next Federal Reserve Chair? Bessent has interviewed 11 candidates, with 4 people most likely to be selected

According to reports, Trump will make a final decision from among four top candidates: former Federal Reserve Governor Kevin Warsh, current Governor Waller, White House economic adviser Kevin Hassett, and BlackRock Chief Investment Officer Rick Rieder. Warsh supports Bessent's central bank reform agenda; Waller has proposed a balance sheet reduction plan; Hassett aligns with Trump’s policy positions; Rieder, as an external candidate, brings extensive experience.

Written by: Dong Jing

The weeks-long interviews for the next Federal Reserve Chair have concluded, and Trump is about to make a final decision from among the four leading candidates: Warsh, Waller, Hassett, and Rick Rieder.

On October 9, according to the Financial Times, U.S. Treasury Secretary Bessent completed the final round of interviews for Federal Reserve Chair candidates. The weeks-long selection process ended on Tuesday, with a total of 11 candidates being considered for the helm of the world’s most important financial institution.

Sources revealed that Bessent focused on the candidates’ stances on interest rate policy and how they would handle the exit from quantitative easing during crises. The candidates underwent a rigorous two-hour interview, with the panel including Bessent, Treasury official Hunter McMaster, and adviser Francis Browne.

The report noted that Trump will make his final decision after the last round of interviews. He previously stated that his preferred candidates include former Federal Reserve Governor Kevin Warsh, current Governor Waller, and White House economic adviser Kevin Hassett. BlackRock’s Global Fixed Income CIO Rick Rieder, as an external candidate, performed “exceptionally well” in the interviews.

The report stated that this personnel change comes at a turbulent time for the Federal Reserve. The Trump administration’s challenge to central bank independence has raised market concerns, with investors betting that the next chair will pursue more aggressive rate cuts.

Bessent’s Questioning Focuses on Central Bank Reform Agenda

During the interviews, Bessent focused on the candidates’ views regarding structural reforms at the Federal Reserve. According to participants, Bessent asked for opinions on points he raised in a recent article, which called for comprehensive central bank reform and criticized quantitative easing as a “gain-of-function monetary policy experiment.”

Candidates were also asked how they would govern an institution Bessent accused of “mission creep.” Bessent believes the Fed’s excessively bloated balance sheet reflects an overexpansion of central bank power and advocates reducing technocratic influence over the government bond market, returning more control to the Treasury Department.

In media interviews, Bessent was tight-lipped about the selection process, only stating that he hopes to find someone “open-minded” and “forward-looking.” He admitted that some candidates’ performances were surprising, making it difficult for him to finalize the list submitted to the White House.

The Four Leading Candidates Each Have Their Strengths

Among the candidates publicly supported by Trump, former Federal Reserve Governor Kevin Warsh echoed Bessent’s views on central bank reform. In an April speech to the Group of Thirty, Warsh supported reducing the Fed’s balance sheet.

Current Governor Waller has also recently outlined a plan to reduce the Fed’s asset holdings, which ballooned during the financial crisis and the COVID-19 pandemic as the central bank purchased government bonds and other securities.

White House economic adviser Kevin Hassett, as a member of Trump’s inner circle, aligns with the president’s policy philosophy. BlackRock’s Rick Rieder, as an external candidate, is recognized for his extensive experience in global fixed income.

According to sources, some candidates performed beyond expectations, increasing the difficulty of the final selection. Bessent admitted last month that the outstanding performance of some candidates made it challenging to narrow down the shortlist.

Market Focuses on Rate Cut Expectations and Independence Concerns

The Federal Reserve is in a turbulent period. Trump has appointed an ally as governor and attempted to dismiss another, raising concerns that the president may undermine central bank independence.

The administration’s repeated attacks on the central bank’s long-standing tradition of independently setting interest rate policy have triggered market volatility and bets that the next Fed chair will pursue more aggressive rate cuts.

Trump ally and Office of Management and Budget Director Russ Vought also criticized the Fed’s $2.5 billion headquarters renovation project as “showy.”

Another member of the president’s inner circle, Bill Pulte, accused the Fed’s first Black female governor, Lisa Cook, of mortgage fraud, prompting Trump to attempt to dismiss her.

However, Cook denied these allegations and sued the president. The Supreme Court stated last week that she can continue working at the Fed at least until January 2026.

Current Chair Powell’s term will end in May 2026, concluding his eight-year tenure as the head of the world’s most important central bank. He can continue serving as a governor until January 2028.