Trump may select new Fed chair by Christmas, Treasury Secretary Bessent says

President Trump is likely to select a new Federal Reserve chair before Christmas, Treasury Secretary Scott Bessent said Tuesday, as the administration tries to move the central bank in a different direction.

Mr. Trump is eager to name a successor to Fed Chair Jerome Powell, who angered the president by taking a cautious approach to reducing interest rates this year.

“I think there’s a very good chance that the president will make an announcement before Christmas,” Mr. Bessent said on CNBC.

The Treasury secretary did not float any names and said he had one more interview to go before a final decision is made. Mr. Powell’s term ends in May.

Mr. Bessent said it would be the president’s prerogative whether to choose the new chair before Christmas or in the new year.

“But I think things are moving along very well,” he said.

Administration officials previously said candidates who could replace Mr. Powell include current Fed Board members Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett and BlackRock Inc. executive Rick Rieder.

The central bank’s Federal Open Market Committee cut interest rates at its last two meetings but is split on whether to cut again at its December session.

Central bankers are caught between stubborn inflation, which argues against a cut, and a desire to slash rates to boost sluggish hiring.

The Bureau of Labor Statistics said non-farm payrolls increased by 119,000 in September, beating Wall Street estimates of 50,000. However, the long-term employment picture has been poor, and the government has not reported more up-to-date numbers due to the recent federal shutdown.

Mr. Bessent said Democrats sparked the shutdown, hurting economic output, so the Fed needs to cut rates.

“We know the economy hasn’t gotten better, so I’m not even sure what the discussion is here,” he said.

CME Fedwatch on Tuesday put the probability of another rate cut in December at 84.7%.

Mr. Trump says Mr. Powell and others at the Fed have been too cautious and too late in cutting rates. He wants them to act more aggressively to give borrowers better terms and juice the economy.

“He’s got some real mental problems. There’s something wrong with him. It’s just ridiculous,” Mr. Trump recently said of Mr. Powell in front of Saudi guests. “I’ll be honest, I’d love to fire his ass.”

Mr. Trump also quipped that he would get rid of Mr. Bessent if he didn’t straighten out the Powell situation.

“If you were in the room, he was joking,” Mr. Bessent told CNBC. “We’ve gotten to this point where monetary policy has gotten very complicated, and it’s more than just cutting rates.”

Mr. Trump says he got bad advice when he appointed Mr. Powell during his first term in 2017. President Joseph R. Biden gave Mr. Powell a second term as Fed chair.