Trump has trimmed down his shortlist for the next Federal Reserve chair to four names, all loyalists: Kevin Warsh, Kevin Hassett, Christopher Waller, and Michelle Bowman.
Speaking on CNBC’s Squawk Box Tuesday morning, Trump confirmed that Scott Bessent, who was previously a strong contender, is no longer in the race. Apparently, Scott had told Trump he prefers to remain at the Treasury Department, shutting down any rumors that he might take the Fed job.
“Well, I love Scott, but he wants to stay where he is,” Trump said during the live interview. “I asked him just last night, ‘Is this something you want?’ [Scott said], ‘Nope, I want to stay where I am. He actually said, ‘I want to work with you.’ It’s such an honor. I said, ‘That’s very nice. I appreciate that.’”
Trump’s final four all support lower interest rates, and each of them has made it clear they’re ready to suck up to him for the sake of getting the job, which makes it clear that the central bank will likely turn political, something Wall Street is not happy about.
Kugler quits as Trump names his final four
Trump’s announcement came just days after Adriana Kugler, one of the Fed governors, abruptly said she’s stepping down. Her resignation becomes effective this Friday. That gives Trump a new vacancy to fill immediately.
Two of Trump’s finalists, Warsh and Hassett, have both served in high-level economic roles and are vocal critics of the Fed’s current approach. Warsh previously sat on the Fed board. Hassett leads the National Economic Council and has been one of Trump’s closest economic policy aides. Both have publicly argued for easing monetary policy sooner and more aggressively.
The other two on the list, Chris and Michelle, are sitting Fed governors who voted last month to cut rates, breaking from Jerome Powell and the majority who chose to hold steady. Their dissents didn’t go unnoticed. Trump told CNBC:
“Both Kevins are very good, and there are other people that are very good, too. Like governors Michelle and Christopher.”
Powell’s future, rate politics, and prediction market odds
Jerome Powell still has time left, as his term ends in May 2026. But as everyone probably knows, Trump has been attacking him publicly since last year, accusing him of delaying rate cuts to protect Democrats. Trump even claimed Powell had promised loyalty.
“Sir, I’ll keep interest rates so low. I’m a low interest rate person,” Trump said Powell told him back in 2017, when Trump nominated him during his first term.
The central bank’s benchmark rate is currently stuck between 4.25% and 4.5%, after staying unchanged last week. Markets expect a drop in September.
Trump claims the last few cuts, especially the full percentage point reduction between September and December 2024, were political favors aimed at helping Kamala Harris, the Democratic nominee.
There’s also been talk that Trump might appoint someone to quietly undercut Powell’s authority before 2026. He didn’t deny it. When asked, he responded, “It’s a possibility.”
Prediction market Kalshi updated its odds after Trump’s comments. Hassett and Warsh each rose to a 35% probability of being picked as chair. Waller dropped to 15%, possibly because Trump didn’t say his name on air. Judy Shelton, who advised Trump during his first term, got 6% odds. David Malpass, who ran the World Bank from 2019 to 2023, was assigned 4%.
Trump himself even received a 1% vote on Kalshi to run the Fed. He’s joked before that he could lead the central bank better than Powell. “If I wanted to do it myself, I could,” he said.
