The search for a candidate to become the head of the Federal Reserve System of the United States continues, and five individuals are on the short list who could lead one of the most important positions in the American economy for the coming year.
The Fed chair wields significant influence over financial markets and the global economy: just a few speeches or statements from the chair can move markets and affect billions of dollars.
The role is so consequential that former President Donald Trump also considered it as a possible path to leading the country in economic affairs.
According to expectations, Trump plans to name his replacement as soon as this winter – that would be one of the earlier announcements of a candidate for the Fed chair before the current head steps down.
A possible scenario envisions two opposing narratives about the state of the U.S. economy: one trajectory is led by Jerome Powell, the other by Trump’s candidate, who is often referred to as the “shadow Fed chair”.
The head of the administration’s selection process, Treasury Secretary Scott Bessent, said that during Labor Day he interviewed about a dozen candidates, and by Monday announced reducing them to five. Their experience spans work in the White House, at the Fed, and in the private sector.
The process has remained dynamic, according to people familiar with the selection, and the final decision rests with Trump himself.
Regardless of who becomes the new head, the nomination must be approved by the Senate, which is currently controlled by Republicans. The new Fed chair will lead the central bank at a time when government actions have raised inflation risk and slowed growth.
As of today, Fed leaders are divided on how the administration’s policy affects the economy.
Who is on the short list for the position of Fed chair
Details and specific names are not publicly disclosed at this time, but the emphasis remains on candidates with experience in the White House, the Fed, and the private sector.
Despite the uncertainty, the financial community is closely watching how the new Fed chair could shape monetary policy and the mid-term outlook for the economy.