US Treasury Secretary Bessent: Fed chair nominee could be announced before Christmas, Fed should return to behind-the-scenes role
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US Treasury Secretary Bessent: Fed chair nominee could be announced before Christmas, Fed should return to behind-the-scenes role
Powell's term runs through 2026, and there is currently a divergence of views within the Fed regarding rate cuts, although a third rate cut remains possible at the December meeting.
Navigating Web3 tides with focused insightsBy: Li Jia
Source: Wall Street Insights
On November 25, U.S. Treasury Secretary Bessent said that President Trump may announce the new Federal Reserve chair before Christmas, providing the market with a relatively clear policy timeline.
On Tuesday local time, media reports indicated that Bessent, who is responsible for finding Powell's successor, revealed in an interview that he still has one final interview to complete and will not speculate on who will become the next Fed chair. Bessent stated:
"I think it's very likely the president will make the announcement before Christmas. But this is entirely at his discretion, whether before the holiday or after the new year. I believe things are progressing smoothly."
Bessent also proposed reforms to the Fed's functions, arguing that the central bank should "return to the background" and simplify its complex toolkit. He specifically pointed out that the Fed's ample-reserves regime has shown cracks; although policymakers decided to halt balance sheet reduction from December to maintain liquidity, current tools—including the standing repo facility—have made the system overly complex. He said:
"I think we must push for simplification. It’s time for the Fed to step back, as it once did, restore stability, and truly serve the American people."
The Treasury secretary also questioned the Fed's current communication practices, suggesting that central bank officials speak too frequently. He emphasized that there are complex interlinkages among monetary policy, the balance sheet, and regulatory policies—an area of particular focus during the selection process for the new chair.
Earlier, Trump had repeatedly pressured the Fed to cut rates, even threatening dismissals, saying he "would love to" fire Powell and urging Bessent to "work hard to influence" the Fed chair to lower key interest rates. Trump even joked to Bessent: "If you don't solve this quickly, I'll fire you." In response, Bessent said:
"If you were in the room, you’d know he was definitely joking. Monetary policy has become very complicated—it’s no longer just about cutting rates."
Current Fed Chair Powell's term expires in May 2026. There remains internal disagreement within the Fed over the necessity of further rate cuts. Based on recent statements by New York Fed President John Williams, markets widely expect the FOMC to approve a third consecutive rate cut at its December meeting.
It is understood that the final candidate list includes National Economic Council Director Kevin Hassett, former governor Kevin Warsh, BlackRock executive Rick Rieder, and current Fed governors Christopher Waller and Michelle Bowman.
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