By Greg Robb
The TV-style approach could present the White House with an excuse to meet with some current Fed officials who don’t support lowering rates
President Donald Trump with Treasury Secretary Scott Bessent in the Oval Office.
Treasury Secretary Scott Bessent is touting the Trump administration’s open approach to choosing the next chair of the Federal Reserve, but the process is just a performance that officials are using to pressure the central bank’s board to lower rates, experts say.
The White House released a list of 11 finalists earlier this month to replace current Fed Chair Jerome Powell, whose term expires in May. This approach now features current and former Fed officials, going beyond the shortlist of Trump loyalists who have been rumored to be in the running for months. Broadening the scope of candidates under consideration could give administration officials the chance to make their case privately to some that it’s time to lower rates.
For months, President Donald Trump and his top advisers have been pressuring Powell and the Fed to lower interest rates.
Bessent said the list of potential Powell replacements now includes 11 “very strong candidates.” He said he’ll be meeting with them in the coming weeks and will narrow down a final list to bring to Trump. “I am looking forward to meeting them with a very open mind,” Bessent said.
For months, the shortlist included former Fed Gov. Kevin Warsh, Trump economic adviser Kevin Hassett and Fed Gov. Christopher Waller.
The expanded list includes three current Fed officials: Fed Vice Chairs Michelle Bowman and Philip Jefferson, and Dallas Fed President Lorie Logan. It also includes former Fed officials Larry Lindsey and James Bullard, as well as private-sector economists such as Marc Sumerlin of Evenflow Macro, Rick Rieder of BlackRock and David Zervos of Jefferies.
Experts have their doubts about the open nature of the process. They say Trump won’t pick someone he doesn’t know or isn’t loyal to him. He will also look for certainty that the next Fed chair will assent to his demand that rates be lowered by 150 to 175 basis points.
“The list seems to be composed of a lot of people who are not likely to be Fed chair. And it does seem like there is some element of performance art involved,” said Tim Duy, chief economist at SGH Macro Advisors.
The names causing analysts to react with the most surprise are Fed Vice Chair Philip Jefferson and Dallas Fed President Lorie Logan.
Jefferson, a former academic, is a member of Powell’s inner circle as the Vice Chair of the Fed board. He was appointed to his post by former President Joe Biden. Logan is a former top Fed staffer who has become well-known for being cautious about lowering interest rates.
There may be a method to the madness
Derek Tang, co-founder of LHMeyer/Monetary Policy Analytics, said the list could present the White House with an excuse to meet with some of the Fed officials who don’t support lowering rates.
“It looks a little more innocuous than just summoning them to the White House to tell them off to their face,” Tang said. “They can just have a frank discussion on why they think the Fed shouldn’t be easing,” he added.
There was a consensus among analysts who spoke with MarketWatch that the list is just another effort by Bessent to put pressure on Powell to ease. “Arguably, it could be an effort to sway Jefferson and Logan in a dovish direction,” Duy said.
Stephen Myrow, managing partner at Beacon Policy Advisors, said Bessent’s team is “trying to pull strings where they can and create pressure on Powell.”
“Ultimately, they don’t control the chair until next May and they want rates to start going down,” Myrow said.
A third motivation may be that members of the list will become a chorus for rate cuts because they want to remain under consideration, drowning out any opposition.
From the White House perspective, “the more people out there vying for this [Fed chair job] longer, the more they will be on television saying why rates will be lower – the better it looks,” Myrow said.
Bessent’s efforts to create more noise in the market – pushing for lower rates – have had an effect, Duy said.
“I think he’s having an influence over rate markets and arguably is acting as something of a shadow chair already,” Duy said.
Who gets the job?
Experts said the outcome of the race to replace Powell is unpredictable. It doesn’t look like a decision is imminent.
“There is not a lot of pressure on Trump to say who it is yet. I don’t think we’ll see a lot of progress on it in the coming weeks,” Tang said.
Despite the surprising list of candidates under consideration, analysts said they don’t expect the ultimate pick to be a surprise. Many of the candidates commonly appear on television to talk about the economy and financial conditions.
“I suspect the group of top-tier candidates is still quite relatively small,” said Myrow of Beacon.
The names on everyone’s list for months include the “two Kevins”: Warsh and Hassett. Stephen Miran, another Trump economic adviser, who the president has nominated to temporarily fill a vacant position on the Fed board, has also been added.
Everyone else on the 11-person list seems less likely.
“Trump seems to want a Fed outsider,” said Duy.
One name that keeps coming up is Treasury Secretary Scott Bessent. Many don’t rule him out as the next Fed chair.
“My observation is we should not write Bessent off as a candidate. I know he’s sort of taken his own name out of the running, and Trump really likes him as Treasury Secretary, but I think there is a lot of time between now and when a final choice has to be made,” said Tang of LHMeyer.
-Greg Robb
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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08-19-25 1409ET
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