During an interview with the Wall Street Journal that was published on Friday, President Donald Trump said he has narrowed his search for a potential new Federal Reserve chair to two men who could succeed Jerome Powell, but it requires Powell to vacate the seat next year.
“I think you have Kevin and Kevin. They’re both—I think the two Kevins are great,” the president said, referring to former Federal Reserve governor Kevin Warsh or National Economic Council Director Kevin Hassett. “I think there are a couple of other people that are great.”
Why It Matters
Trump has found himself at odds with Powell, the man he nominated to lead the Fed in 2018 during his first administration. The Fed chair holds his position for four years, with another potential term of four years if reappointed.
Some Democrats opposed Powell receiving a second term, but then-President Joe Biden renominated him in November 2021, with a confirmation in May 2022, meaning his second term will last until May 2026. He would remain governor of the Fed’s board until 2028.
What To Know
Trump spoke with the Journal in an interview published Friday, during which the newspaper asked him about Powell’s replacement, stating that Hassett is increasingly viewed by outsiders as the front-runner. The president has teased in recent weeks that he has settled on a choice but continues to say he is considering his choice carefully.
“I think I have somebody that I like the best. I like all of them, but I want to be careful because I was given a bad recommendation,” Trump said, referring to Powell’s nomination in 2017.
Chief among his criteria for pick to replace Powell is their position on interest rate cuts.
“He thinks you have to lower interest rates, and so does everybody else that I’ve talked to,” Trump said about Warsh, adding that while it is no longer customary for the Fed chair to consult the president on interest rates, he would like to see the next chair do so as he aims to get the interest rate down to 1 percent or lower.
“It used to be done routinely. It should be done,” Trump said. “It doesn’t mean—I don’t think he should do exactly what we say. But certainly we’re—I’m a smart voice and should be listened to.”
“We should have the lowest rate in the world,” the president added.
Who Is Kevin Warsh? What to Know
Warsh served as a Fed governor from 2006 to 2011. He’s a New York native, born in Albany. He studied public policy with an emphasis on economics and statistics at Stanford University, graduating with honors in 1992.
Warsh then studied at Harvard Law School, graduating with a degree in 1995, while also completing coursework in market economics and debt capital markets at the Harvard Business School and Massachusetts Institute of Technology (MIT)’s Sloan School of Management.
He worked in Morgan Stanley& Co.’s mergers and acquisitions department, leaving in 2002 to join President George W. Bush’s administration as special assistant to the president for economic policy and as executive secretary at the National Economic Council. Bush later nominated Warsh to serve on the Fed’s Board of Governors.
He also served as the president’s representative at a G20 meeting.
Who Is Kevin Hassett? What to Know
Hassett, a native of Greenfield, Massachusetts, graduated from Swarthmore College with a degree in economics, going on to earn a PhD in economics from the University of Pennsylvania.
After a stint as an assistant professor of economics at Columbia Business School, Hassett joined the Division of Research and Statistics for the Fed’s Board of Governors, later serving as a policy consultant to the Treasury during both the first Bush’s administration and Clinton administration.
He then joined the American Enterprise Institute as a resident scholar in 1997, later taking over as director of economic policy for the think-tank.
Trump nominated Hassett to lead the Council of Economic Advisors in his first term, but he ultimately stepped down from his post in 2019, later returning on a temporary basis in 2020 to help manage the COVID-19 pandemic.
Why Does Trump Want to Replace Jerome Powell?
During his second term, Trump has leveled significant criticism against Powell for his reluctance to cut interest rates as the president has repeatedly argued it is a necessary step to help alleviate the financial pressures on the American market and taxpayers. This week, Powell cut the quarter-point rate to 3.6 percent, which Trump said was “rather small” and not what he wants from the Fed.
What Happens Next?
Trump is set to hold a final round of interviews with top contenders to be Fed chair, according to the Journal. Treasury Secretary Scott Bessent also interviewed the two Fed governors Trump appointed during his first term, indicating their potential candidacy in a narrowing field.