WASHINGTON (Reuters)-US President Donald Trump said on Tuesday that Treasury Secretary Scott Bessent could be a candidate to replace Federal Reserve Chair, Jerome Powell, but suggested that this may not happen.
After landing at Andrews Air Base, Trump was asked if Bessent would be an option to replace Powell, whose mandate ends in May 2026.
“He’s an option, and he’s very good. Well, he’s not, because I like the work he’s doing, right?” Trump told reporters.
In recent months, Trump has been harshly criticized Powell because he is not reducing US interest rates and has repeatedly insisted to resign. The president cannot fire Powell because of a political dispute. Trump indicated Powell, a republican colleague during his first presidency, and he was reappointed to a second term as chief of the Fed by Democratic President Joe Biden.
With low unemployment rate and inflation above the 2% Fed target, US Central Bank officials have been reluctant to cut interest rates from the current 4.25% to 4.5% range until it is clear that Trump’s tariff policies will not lead to a new increase in prices.
US data released on Tuesday showed that consumer prices have increased in a series of products, from coffee to audio equipment and household furniture, which, according to economists, is evidence that increasing import rates are being passed on to consumers. Consumer prices generally increased by 0.3% in June, which is equivalent to an annual rate of approximately 3.5%, after an increase of 0.1% in May.
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Other people being considered to replace Powell include former Fed Kevin Warsh director and Trump’s main economic advisor Kevin Hassett.
Bessent, who also played a key role in Trump’s commercial negotiations with several countries, told Bloomberg Surveillance on Tuesday that a “formal process” was already beginning to identify a possible Powell successor.
“There are many excellent candidates, and we’ll see how quickly the process advances,” said Bessent.
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He said he would be confused for Powell to stay in the Fed after the end of his term as Chair in May 2026. Powell’s mandate as Fed Director extends until January 31, 2028.
Trump government authorities argue that a fiscal bill that is about to be approved in Congress will stimulate private sector investment and strengthen the US economy, and insist that although tariff increases may result in a unique increase in prices, they should not raise long -term inflation.
