US President Donald Trump has named Kevin Hassett, Kevin Warsh, and Christopher Waller as finalists to succeed Jerome Powell as chairman of the Federal Reserve. Trump told reporters at the White House that he had considered Scott Bessent, but the Treasury Secretary was not interested in the role. The president has been vocal about his desire for a Fed leader more aligned with his push for interest rate cuts, criticising Powell for acting too late on borrowing costs. The Federal Reserve System is the central banking system of the United States of America, it was created on December 23, 1913, with the enactment of the Federal Reserve Act. It performs a number of functions, including setting monetary policy, supervising and regulating banks, and maintaining the stability of the financial system.
The choice of a Fed chairperson is a critical decision for financial markets, which carefully analyse Fed leadership changes for signals about the future direction of interest rates, inflation policy, and the central bank’s independence. The US Labour Department recently reported that job growth weakened in August, and the unemployment rate rose to 4.3 per cent, confirming a softening in the labour market.
Powell noted last month the potential risks to the labour market, suggesting a possible policy adjustment, which analysts interpreted as support for a 0.25 per cent interest rate cut in September. However, this is far less than the multiple percentage points of cuts that Trump has been advocating.
Hassett, director of the National Economic Council, supports Trump’s tariffs and agrees that the Fed’s rates have been too high. Warsh has called for a “regime change” at the Fed, while Bessent has criticised the central bank’s operations, calling for a full review.
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