Trump says Treasury Secretary Vincent "doesn't want" to be Fed chair, with four candidates listed

Speaking on the programme on Tuesday, Mr. Trump said he had narrowed down the list of candidates to be the next Fed chairperson to four but did not include Treasury secretary Scott Bescent, who had been considered a favourite. Mr. Trump did not disclose a specific list of candidates but said Mr. Bescent had dropped out of the race.

Trump said: "I admire Scott, but he wants to stay in his current position. I asked him last night, 'Is this the position you want?' He said, 'No, I want to stay where I am.' He also said, 'I want to work with you.' It was an honor. I responded by saying, 'That's great, I appreciate it.'"

The announcement, which follows the surprise announcement on Friday by Adriana Kugler, the Fed governor, that she would resign on Friday, provides Mr. Trump with an opportunity to reappoint a member of the board at a time when the White House is actively pushing the central bank to lower interest rates.

Potential candidates include Kevin Walsh, a former Fed governor, and Kevin Hassett, director of the National Economic Council, both of whom have advocated lower interest rates. Christopher Waller, a Fed governor, is also considered on the shortlist. "Both Kevin's are excellent, and there are others who are excellent," Mr. Trump said, calling Mr. Coogler's resignation "a pleasant surprise."

The current Fed chairperson, Jerome Powell, whose term ends in May 2026, has been a target of criticism from Mr. Trump, who has speculated that he could appoint a "shadow chairperson" to undermine Mr. Powell's influence until the end of his term. Mr. Trump did not explicitly commit to such a strategy, but said "it is a possibility."

Mr. Trump, who nominated Mr. Powell to head the Fed when he first became president in 2017 and was confirmed by the Senate the following February, claimed on Tuesday that Mr. Powell had told him: "Sir, I will keep rates low. I am a low-interest-rate supporter."

The Federal Reserve decided last week to leave the base rate unchanged at 4.25% -4.5%. Markets expect the Fed to approve the next rate cut in September. The Fed has already cut its policy rate by a full percentage point between September and December 2024, moves that Trump says are politically motivated to help Democratic presidential candidate Kamala Harris.

Bloomberg reports that Trump's continued pressure on the Federal Reserve reflects his desire to tighten his grip on monetary policy by appointing people close to his own economic philosophy. The article points out that Kevin Walsh and Kevin Hassett are in line with Trump's economic vision because of their stance in favor of low interest rates and pro-market policies. In addition, Bloomberg mentions that concerns have been expressed within the Federal Reserve about Trump's possible intervention, as it could threaten the independence of the Federal Reserve. Market analysts expect that if Trump succeeds in nominating an easing-leaning chairperson, the dollar could come under downward pressure, while the stock market could rise in the short term in anticipation of looser monetary policy.

Reuters reported that Kugler's resignation may be related to the pressure exerted by the Trump administration on the Federal Reserve. The report mentioned that Christopher Waller, as the current Federal Reserve governor, is considered a strong contender for the chairpersonship because of his dovish stance on interest rates. Reuters analysis said that Trump may use Kugler's vacancy to quickly promote his own candidate to the Federal Reserve Board of Governors, thus preparing for the transition after Powell's term ends in 2026.

The Wall Street Journal report emphasizes that Trump's criticism of Powell stems from his dissatisfaction with high interest rates, arguing that it hinders economic growth. The article points out that Kevin Hassett, as Trump's long-term economic adviser, may have an advantage among the candidates because he has a strong support base within the White House. In addition, the report mentions that the market's increased uncertainty about the future policy of the Federal Reserve has led to the recent volatility in bond yields, and investors are closely watching Trump's nomination decision.

According to discussions on social media platform X, many users expressed concern about Trump's attempts to influence the independence of the Federal Reserve. Some economic commentators on X pointed out that the economic philosophy of Warsh and Hassett, which favors deregulation and low interest rates, may be highly compatible with Trump's "America First" policy. However, some users argued that if the Fed completely bowed to political pressure, it could lead to long-term economic instability.