Powell Out? US Kicks Off Formal Process to Replace Fed Chief, Confirms Treasury Secretary

The hunt for the successor of Federal Reserve Chairman Jerome Powell is offically taking place, confirmed U.S. Treasury Secretary Scott Bessent in an interview to Bloomberg.

“There are a lot of good candidates inside and outside the Federal Reserve," Bessent said.

Further, he suggested that Powell should consider stepping down from the Fed entirely once his chairmanship ends, arguing that such a move would avoid confusion and maintain market stability.

“Traditionally, the Fed chair also steps down as a governor,” Bessent said. “There’s been a lot of talk of a shadow Fed chair causing confusion in advance of his or her nomination. And I can tell you, I think it’d be very confusing for the market for a former Fed chair to stay on also.”

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What's Next For Powell?  

Powell’s term expires in 2026, and he could techinaclly remeain part of Fed’s Board of Governors until January 2028. However, Bessent’s comments highlight the administration’s desire for a clean break, with a new chair taking the reins and Powell stepping aside entirely.

As per Bessent, the White House aims to announce a nominee for the next Fed chair as early as October or November.

The Trump government has always kept its stance on Powell publicly clear. Trump had earlier voiced his interest in having a leader more aligned towards lower interest rates, and a more accomodative stance.

Trump has repeatedly  demanded that Powell “resign immediately,” whilst dubbing him “very bad for the country” and blaming him for not cutting interest rates as aggressively as Trump desires.

Trump and his advisers have openly discussed the possibility of firing Powell “for cause,” with some officials suggesting that the headquarters renovation could provide legal justification.

One of these is Kevin Hassett, director of the National Economic Council, a name who has been floated as a potential Powell successor, meanwhile, the rumour mill has been churning theories that highlight the possibility of a shadow chair ahead of Powell's present term comes to an end.