Breaking: Fed Chair Jerome Powell Successor Process Has Started: Scott Bessent

U.S. Treasury Secretary Scott Bessent has confirmed that a process to find a successor to Federal Reserve Chair Jerome Powell has begun. This comes amid political pressures and ongoing debates regarding U.S. monetary policy, as well as speculation in financial markets about Powell’s future.

Formal Process To Decide Jerome Powell’s Successor Underway

In a recent interview with Bloomberg Television, U.S. Treasury Secretary Scott Bessent stated that the process to select a potential successor to Federal Reserve Chair Jerome Powell is officially underway.

Bessent emphasized that there are “a lot of great candidates” for the role, signaling that the search will include individuals both within and outside of the Federal Reserve system. “We’ll see how rapidly it progresses,” Bessent added, indicating that the process may move quickly.

Jerome Powell’s current term as the head of the U.S. central bank is set to end in May 2026. However, speculation surrounding his future has grown, particularly in the wake of ongoing political pressures and legal scrutiny.

The focus on Powell’s possible replacement follows repeated calls from President Donald Trump, who has urged Powell to resign due to his monetary policy decisions. Trump has expressed dissatisfaction with Powell’s handling of interest rates, which he believes are too high and detrimental to economic growth.

Speculation Around Powell’s Resignation

In addition to the political pressure, Jerome Powell is also facing a potential investigation in connection with a renovation project at the Federal Reserve. This development has led to calls for a congressional investigation, with FHFA Chairman William Pulte leading the charge.

Moreover, the personal pressure exerted by Trump has led to the speculation that the Fed Chair may opt to quit his position before the officially scheduled end of his term in May 2026.

This increasing attention and scrutiny have resulted in a delicate situation where the future of Jerome Powell at the Fed is increasingly unclear. This has caused uncertainty in the markets, with speculators also drawing attention to how the announcement of the next Chair  way early could lead to a “shadow Fed.”

On the other hand, Treasury Secretary Scott Bessent noted that it would likely be “confusing” to the markets to have Jerome Powell continue as a board member following his resignation as chairman. Bessent remarked,

“I think it’d be very confusing for the market for a former Fed chair to stay on also.”

As the process to find the Fed Chair’s successor moves forward, several individuals have emerged as potential candidates. Polymarket data shows Kevin Warsh and Bessent lead the pack with a 20% chance, followed closely by Kevin Hassett with an 18% chance.

Meanwhile, Chris Waller, a current Federal Reserve governor, has a smaller 6% chance. Interestingly, Waller has been vocal about a Fed rate cut. However, he stated that his stance is not political.