Replacement of Jerome Powell: Kevin Warsh, Kevin Hassett, Chris Waller for Trump

The restricted list is narrowed because the calendar for an appointment of appointment is getting closer. Last month, the president said that he would confirm his decision “very soon”, potentially in order to move attention to the new president of the Fed and far from Powell.

This week, Trump also abandoned another crumb for spectators: the secretary of the Treasury Scott Bessent will not go to the Fed.

The name of Bessent had circulated for the role of its history and its close relations with the president. But yesterday, Trump told CNBC: “I love Scott, but he wants to stay where he is. I asked him last night: “Is it something you want?” (Bessent said): “No, I want to stay where I am. It is such an honor.

Bessent was clear that he wanted to stay in the treasure but would go where the president had asked him, saying earlier this year that he had the “best job” in Washington and “would like to stay at my headquarters until 2029.

Bessent withdrawing from affirmations, Trump confirmed that he now had four names in mind as potential successors to lead the Federal Open Market Committee. The Oval Office has also rendered at least one of the clear criteria: the next president of the Fed must be more willing to reduce rates.

Option 1: Kevin Warsh

Former member of the Fed Governors’ Council, Warsh was considered a favorite for the president of the Fed since President Trump took office. Warsh sat on the Board of Directors between 2006 and 2011, acting as a managing administrative governor and supervising the group’s operations, staff and financial performance.

Trump has already spoke warmly about Warsh, telling Air Force journalists one last month to which Warsh is “very well thought out”.

Warsh, currently an economy scholarship holder at the Hoover Institution and professor at the Stanford Graduate School of Business, is optimistic about the American economy and supported the calls that Trump 2.0 could inaugurate an era of gold for the nation.

The White House could also like some of the criticisms that Warsh launched at Fed’s current thought. Warsh told CNBC a few weeks ago that if he was the president, a main concern would be a federal reserve that does not recognize the advantages of economic data.

“What would worry me is a central bank that sees none of this. A central bank that is stuck with models from 1978, the governance of a previous period, and (does not recognize) that we could be at the front of a boom in productivity,” said Warsh. “If I were the president, I would worry that (the Fed) might not see him and that they might think that economic growth is going to be a sort of inflationary.”

For many years, Warsh has also called for a “regime change” at the Fed, and argued: “It is not only a person, it is an approach to the economy … I am disturbed when I see them move the goal. Post of goal like that.

Potentially a brand against the name Warsh is that it has certain characteristics of a hawk – those who keep the base rate higher in order to maintain low inflation. In a conversation with the Hoover Institute at the beginning of the month, for example, he pointed out that the stability of prices is at the heart of the restoration of Fed’s credibility.

To this end, wrote in a note to customers this morning: “Warsh stands out as the candidate most suitable for the USD at this stage … We were able to see support for support on his appointment.”

Option 2: Kevin Hassett

Warsh is not even the only Kevin in the running, Trump revealed. Yesterday he said: “The two kevins are very good, and there are other people who are very good too.”

Kevin Hassett leads the polls at present, as director of the National Economic Council. According to the Kalshi prediction market, Hassett is at a price of 41% chance of winning the appointment, while Warsh is 29%.

Hassett has been an integral figure of Trump 2.0 so far, supporting everything, commercial transactions under the new pricing regime to speak with members of the room of key legislation such as the `Big and Beautiful Bill Act ”.

This very fact may be the reason why Trump can move away from Hassett’s appointment: he can raise questions about the independence of the Fed.

Despite a friendly face at the head of the FOMC, the White House will be aware of the fact that the autonomy of the Central Bank is a fundamental force of the economy. Trump has already learned of the hard way how the markets react to the threats perceived against this independence, after being forced to resume a threat to draw Powell and the markets rebelled.

Questions of transparency and independence were widespread during last week after President Trump rejected the head of the Bureau of Labor Statistics (BLS) after surprise and important revisions to the declaration of work data. Asked about the way he would tackle such criticism, Hassett said: “I am an economist, I am not a politician. But when politicians watch figures that make them wonder, then it suggests that there must be more transparency.”

In a note overnight, Goldman Sachs suggested that other advice on the next president could take the form of a replacement for the governor of the Fed, Adriana Kugler, who resigned last week. The United States economist Jan Hatzius wrote: “If it is confirmed very quickly, the new governor could be able to participate in the meeting from September 16 to 17.

“The choice is particularly important because the new governor may well resume the leadership of the FOMC of President Powell.”

Option 3: Christopher Waller

Governor Waller was a appointment of President Trump in 2020, in a term ending in 2030, already marking him as a person who won the opinion and respect for the current White House.

But in recent months, Waller has raised the eyebrows as potentially auditioning the role of the president of the Fed. He was notably one of the two members who dissident against the recent FOMC decision not to reduce the basic rate of its current level by 4.25 to 4.5%.

As Paul Donovan d’UBS wrote it at the end of last week: “Investors are forced to suspect that justification was little more than a leap from top to bottom and shouting” Pick Me, Pick Me “in the general direction of the White House.”

Waller has pressure for a rate drop for a while, and suggested that he would like to see a faster turnaround when this action could take place. However, even it led economists to wonder if the governor is a real defender of a reduction or seeks to publicly appeal to the president for this role.

Like Jeremy Siegel, professor emeritus of finance at the Wharton School of the University of Pennsylvania, wrote for Wisdomtree, where he is a main economist, last month: “Chris Waller argued … for a potential rate of rate in July.

Option 4: Relative aberrant values

Elsewhere, President Trump could consider himself the FOMC member Michelle Bowman, as a potential candidate, because she was too heard against the Fed’s decision to hold rates.

Bowman, vice-president of the Fed supervision, justified his position with: “Inflation has considerably approached our objective, after having excluded the temporary effects of prices, and the labor market remains near employment. With slowing economic growth this year and signs of a less dynamic policy market.

“In my opinion, this action would have proactively covered against another weakening of the economy and the risk of damage to the labor market.”

And more broadly, the name of economist Judy Shelton was also launched. Shelton was, after all, an appointment of Trump to the Fed during his first mandate, but did not receive support for the congress to go to the board of directors.

At the time, many were worried about how Shelton’s economic analysis was closely aligned with the President – including calls for a greater reduction than expected at rates – and asked for what it appreciated the fact of enhancing the independence of the Central Bank.

Since then, Shelton has put pressure for the inflation objective (currently set at 2%) is lowered to zero in order to “make life much less complicated for all of us who must use the dollar and constantly express things in terms of adjusted inflation”.