Interviews to Replace Fed Chairman to Start After Labor Day, Bessent Says

The current central bank chairman’s term ends in May.

Treasury Secretary Scott Bessent attends a news conference in Stockholm on July 29, 2025. Magnus Lejhall/TT News Agency/via REUTERS/File Photo

Potential candidate interviews for the post of the new Federal Reserve chairman will be happening soon, Treasury Secretary Scott Bessent said in an Aug. 19 interview with CNBC.

“In terms of the interview process, we’ve announced 11 very strong candidates,“ Bessent said, without providing any more details on the list. ”I’m going to be meeting with them probably right before [and] right after Labor Day, and to start bringing down the list to present to President [Donald] Trump.”

This year, Labor Day falls on Sept. 1.

“It’s an incredible group,“ Bessent said. ”It’s people who are at the Fed now, have been at the Fed, and private sector. So I’m looking forward to meeting all of them with a very open mind.”

The Fed chairman is nominated by the president for a four-year term and must be confirmed by the Senate.

The term of the current Fed chairman, Jerome Powell, is set to expire in May 2026.

Talking about the Fed’s high interest rates, Bessent said the central bank is seeing “some distributional aspects to the higher rates,” especially in housing and lower-income households with high credit card debt. On one hand, there is a boom in capital expenditure, while on the other hand, households and home building are struggling, he said.

“If we keep constraining home building, then what kind of inflation does that create one or two years out?“ he said. ”So, you know, a cut here could facilitate a boom or a pickup in home building, which will keep prices down one, two years down the road.”

Bessent was asked whether the producer price index (PPI) inflation number for July, published last week, suggests that it is the right time to cut 50 points or at least 25 points from the Fed’s interest rate.

PPI measures prices paid by businesses for goods and services. In July, the index rose by 3.3 percent year over year after remaining below the 3 percent level for the previous three months.

Bessent dismissed the PPI increase, highlighting the fact that since Trump first came to office, there have been five “very tame” PPI figures. He said a major component of July’s PPI number was investment services, “which just means the market went up a lot.”

Bessent’s comments about interviewing Fed chairman candidates come amid rumors about multiple names that could take over as Powell’s successor, including former Fed board member Kevin Warsh, current Fed board member Christopher Waller, and National Economic Council Director Kevin Hassett.

Trump has been at odds with Powell over the issue of rate cuts. The president has pushed for lowering interest rates to bring down borrowing costs and trigger growth.

However, Powell has maintained that rates will only be cut once the central bank is convinced that inflation will not rise because of Washington’s tariff policies.

In July, Bessent said the formal process for selecting a new Fed chairman was underway and clarified that Trump has no intention to remove Powell before the end of his term in May despite differences in opinion.

On July 25, Trump said he may appoint a new Fed chairman based on the candidate’s willingness to lower rates.

Rate Cut Issue

Since December 2024, the Fed has kept interest rates unchanged in a range of 4.25 percent to 4.5 percent for five consecutive meetings.

There are three more policy meetings scheduled for the central bank in 2025: one from Sept. 16 to Sept. 17 and one each in October and December.

After the July meeting, Powell cited inflation as a cause for concern, arguing that the effects of tariffs on inflation “remain to be seen.”

“We see our current policy stance as appropriate to guard against inflation risks,” he said.

However, Waller and Fed Vice Chair for Supervision Michelle Bowman had dissented from the decision to keep rates unchanged at the July meeting.

The one-off increases in price level should be “looked through,” Waller said, arguing that the current monetary policy was more restrictive than necessary.

In an Aug. 12 post, ING Bank stated that while the cost of many goods will end up rising in time because of tariffs, it does not “see inflation pressures persisting.”

Between 2021 and 2022, inflation jumped to 9 percent. At the time, oil prices tripled, home prices and rents surged, and the job market remained “red hot” amid soaring wages, the bank stated. All of these factors contributed to rising inflation.

“Today, these are all disinflationary influences, with cooling housing rents in particular set to help offset the effect of tariffs over the coming quarters,” ING Bank stated.

“With the jobs market not looking as solid as it did earlier in the year and consensus [gross domestic product] growth forecasts having been cut from 2.5 percent at the beginning of this year down to 1.5 percent we believe the Fed will cut the policy rate in September and follow up with additional 25 [basis point] cuts in October and December.”