President Donald Trump has indicated he has decided whom to nominate as the next Federal Reserve Chair, but he stopped short of revealing the individual's identity.
"I've made my decision in my mind," he stated during an interview on Wednesday evening. "I haven't spoken to anyone about it yet."
When specifically asked about his chief economic advisor, Kevin Hassett, Trump replied, "I don't want to say," but described him as "certainly one of the people I like."
Whoever Trump selects will take the helm of an institution at a critical juncture, with the Fed at the center of an intensely aggressive pressure campaign by Trump to drastically lower borrowing costs. Current Chair Jerome Powell, whose term expires in May, has become a frequent target of Trump's attacks, signaling that the next chair could face fierce criticism if they fail to meet the President's demands.
Congress established long-standing guardrails to insulate the Federal Reserve from political interference, ensuring it can pursue low and stable inflation and a healthy labor market unimpeded. However, Trump has been outspoken about his desire for the Fed to act according to his wishes.
Trump has made it clear that his pick for Fed Chair must support lowering borrowing costs, even claiming that anyone who disagrees with his views would never get the job.
His criteria have raised concerns that Powell's successor will struggle to uphold the Fed's longstanding independence and could grant the President greater influence over the policy-making process.
Although the Fed Chair's views carry significant weight, interest rate decisions are made by a vote of the 12-member Federal Open Market Committee (FOMC), which consists of the seven Washington-based governors, the president of the New York Fed, and four rotating regional Fed presidents.
Hassett, who serves as Director of the White House National Economic Council, has sought to calm concerns about how he would lead the institution since emerging as a frontrunner late last year. He has stated that Trump would have "no weight" in interest rate decisions, though he hinted that he would listen to the President's opinions.
Treasury Secretary Steven Mnuchin said during an event on Thursday that he expects Trump to make a decision on the Fed Chair this month, potentially before or after the President attends the World Economic Forum's annual meeting in Davos, Switzerland. The forum runs from January 19 to 23. Mnuchin also hinted that the position is not guaranteed to go to Hassett, noting there are a total of four candidates.
Other contenders include former Fed Governor Kevin Warsh, who was close to securing the position during the first Trump administration, and current Fed Governor Christopher Waller. Trump spoke highly of both candidates after interviewing them in December.
The Fed's independence will face another critical test in early 2026, stemming from litigation involving Fed Governor Lisa Cook, whom Trump attempted to dismiss last year. On January 21, the Supreme Court will hear arguments related to Cook's case, the latest in a series of lawsuits connected to Trump's efforts to seize more control over independent agencies established by Congress.
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