A new and powerful name has entered the fray to lead the world’s most influential central bank. U.S. Treasury Secretary Scott Bessent is now seen as a serious contender to succeed Jerome Powell as Chair of the Federal Reserve, according to a growing chorus of advisors both within and outside the Trump administration.
The move, first reported by Bloomberg, adds a fascinating dynamic to the succession race, given that the Treasury Secretary traditionally plays a pivotal role in selecting the very candidate they might now be competing against. President Donald Trump, who has been publicly critical of the current Fed leadership, stated last week he would name a successor to Powell “very soon,” well ahead of the end of Powell’s term in May 2026.
While formal interviews have reportedly not yet commenced, the chatter around Bessent is significant. As the administration’s point man on sweeping economic reforms in trade, taxes, and regulation, Bessent has been at the forefront of implementing the President’s agenda. His supporters see him as a safe and trusted pair of hands for global capital markets.
“Scott Bessent proved he could implement President Trump’s agenda during an incredibly turbulent first six months,” said Steve Bannon, a former chief White House strategist. “He’s not just the star of the cabinet, but a safe pair of hands for global capital markets.”
In response to the speculation, Bessent remained diplomatic, stating, “I have the best job in Washington. The President will decide who’s best for the economy and the American people.”
A Crowded Field and a Potential Conflict
Bessent’s emergence places him in contention with other known candidates, most notably Kevin Warsh, a former Federal Reserve governor. Warsh, who was interviewed for the Treasury Secretary position in November, has long been considered a frontrunner. Economist and Trump ally Arthur Laffer has publicly endorsed him, stating, “As I told the president, I think Kevin Warsh is just perfect for the job,” while noting of Bessent, “his specialty is not monetary policy.”
The potential nomination of a sitting Treasury Secretary to the Fed’s top job is raising eyebrows for its break with tradition. The Treasury chief typically oversees the search and interview process for a new Fed Chair. It remains unclear if Bessent would need to recuse himself as the President’s decision-making process gets underway.
“Given the amount of trust and confidence that the global financial community has in Scott Bessent, he’s an obvious candidate,” said Tim Adams, president and CEO of the Institute of International Finance, calling him a “dark horse.” Adams believes that either Bessent or Warsh “would be given the benefit of the doubt from the financial community” regarding the preservation of the Fed’s independence.
The Shadow of Political Influence
This succession saga unfolds against a backdrop of President Trump’s frequent and public criticism of Powell’s monetary policy. Trump has repeatedly lamented that the Fed has not cut interest rates aggressively enough, recently calling for a “full point” cut to act as “rocket fuel” for the economy.
Whoever takes the helm will face intense scrutiny and the immediate challenge of reassuring global markets that the Federal Reserve’s independence from political interference remains sacrosanct. The new chair will need to navigate the lingering economic uncertainties from the administration’s tariff policies while managing inflation and growth expectations.
As the administration prepares to make its “very soon” announcement, the financial world will be watching closely. The choice between an established monetary policy expert like Warsh and a powerful political insider like Bessent will send a clear signal about the future direction of the U.S. economy and the long-cherished independence of its central bank.
Treasury Chief Scott Bessent Tipped as Frontrunner to Helm the Federal Reserve
A significant shift in the leadership of the world’s most influential central bank is on the horizon, with U.S. Treasury Secretary Scott Bessent emerging as a leading candidate to succeed Jerome Powell as Chair of the Federal Reserve. The development comes as President Donald Trump has indicated a decision on Powell’s successor, whose term concludes in May 2026, will be announced “very soon.”
The potential nomination of a sitting Treasury Secretary to the Fed’s top post is a noteworthy move, sparking discussions on the future of U.S. monetary policy and the long-cherished independence of the central bank. Bessent, a former hedge fund manager with a deep understanding of global markets, is currently spearheading the Trump administration’s economic agenda, which includes sweeping reforms in trade, taxation, and regulation.
The Architect of ‘America First’ Economics
Bessent’s rise as a contender is backed by a growing chorus of advisors both within and outside the administration.7 His proponents point to his instrumental role in implementing the President’s economic vision as a key qualification. A prominent voice in this camp, Steve Bannon, former White House chief strategist, lauded Bessent’s performance, stating, “Scott Bessent proved he could implement President Trump’s agenda during an incredibly turbulent first six months. He’s not just the star of the cabinet, but a safe pair of hands for global capital markets.”
At the core of Bessent’s economic philosophy is the ambitious “3-3-3 plan,” which aims for 3% annual GDP growth, a reduction of the budget deficit to 3% of GDP, and a 3-million-barrel-per-day increase in domestic oil production. This pro-growth agenda, however, has been met with skepticism by some economists who deem it “wildly unrealistic.”
Should he be nominated and confirmed, Bessent’s immediate challenge would be to navigate the inherent conflict of interest. As Treasury Secretary, he would traditionally play a pivotal role in the selection process for the new Fed Chair. It remains unclear if he would recuse himself from this duty. When questioned about the possibility of his candidacy, Bessent has remained focused on his current responsibilities, stating, “I have the best job in Washington. The President will decide who’s best for the economy and the American people.”
A Field of Contenders and the Shadow of Fed Independence
Bessent is not the only name in the running. Kevin Warsh, a former Federal Reserve governor, is also a strong candidate and is said to be highly regarded by President Trump. Warsh, who has been critical of the Fed’s quantitative easing policies, is seen by some as a more traditional choice with direct central banking experience. Economist and Trump ally Arthur Laffer has publicly endorsed Warsh, noting that while Bessent is “wonderful,” his “specialty is not monetary policy.”
Other potential candidates include National Economic Council Director Kevin Hassett, Fed Governor Christopher Waller, and former World Bank President David Malpass.
The eventual nominee will undoubtedly face intense scrutiny regarding their commitment to the Federal Reserve’s independence from political influence. President Trump has been a vocal critic of current Chair Jerome Powell, frequently lambasting the Fed for not lowering interest rates more aggressively. A key concern for market participants and policymakers alike is whether a new chair, particularly one with close ties to the administration like Bessent, would be perceived as being beholden to the President.
Tim Adams, president and CEO of the Institute of International Finance, believes that either Bessent or Warsh “would be given the benefit of the doubt from the financial community” to preserve the Fed’s autonomy. However, the historical precedent set by the Banking Act of 1935, which separated the Treasury from the Fed, underscores the gravity of any move that could blur these lines.
Gauging the Potential Impact
Financial markets are closely watching the succession race, with analysts offering a nuanced view of a potential Bessent-led Fed. The “bull case” suggests that a Chair with deep Treasury and market experience could lead to more predictable and coordinated fiscal and monetary policy, potentially boosting market liquidity and aiding economic recovery. Conversely, the “bear case” highlights the risk of politicizing the Fed, which could destabilize markets and undermine confidence in the central bank’s ability to manage inflation.
The ultimate decision rests with President Trump, and the chosen successor will face a rigorous confirmation process in a narrowly divided Senate. The outcome will have profound implications for the direction of the U.S. economy and the global financial landscape for years to come.
