Trump says Bessent doesn’t want to be considered for Fed chair

President Donald Trump said Treasury Secretary Scott Bessent told him he did not want to be nominated to replace Mr Jerome Powell as the next chair of the Federal Reserve.

“I asked him just last night, is this something you want? Nope, I want to stay where I am,” Mr Trump said on July 5 in an interview with CNBC.

“He’s doing a great job, and he wants to do what he’s doing, so I just take him off. He does not want it,” Mr Trump continued. “He likes being Treasury secretary. He’s doing a really good job.”

Mr Trump said he was considering four candidates – including former Federal Reserve governor Kevin Warsh and National Economic Council director Kevin Hassett – for the post, but cautioned he didn’t intend to make the decision soon.

“I think I say Kevin and Kevin, both Kevins are very good, and there are other people that are very good too,” Mr Trump said.

On Aug 1, Ms Adriana Kugler announced that she would vacate her board of governors seat, which was not due to expire until January, giving Mr Trump an earlier opportunity than expected to shape the central bank’s rate-setting policies by picking a replacement who aligns with his preference for lower borrowing costs.

The president has exerted intense pressure on the Fed in his demand for lower interest rates, using social media to attack Mr Powell. Mr Trump on Aug 1 called for Mr Powell to resign and at times has mulled over whether he should fire him or just wait out his term, which is set to expire in May. 

Mr Trump has previously said he has a “couple of people in mind” for Ms Kugler’s post and the president’s nominee for the open governor’s spot could also move into the role of chair when Mr Powell’s term is up.

Mr Trump has been sharply critical of the Fed, repeatedly blaming the central bank and Mr Powell for being too slow to lower interest rates. Mr Trump has argued that the central bank – which has so far left rates unchanged in 2025 – is keeping the federal government’s debt-servicing costs too high and restraining economic growth.

Last week, Mr Powell didn’t offer any clear sign that policymakers were likely to cut at their next meeting, in September, but market expectations moved after that meeting. 

New jobs numbers on Aug 1 showed a labour market that was cooling dramatically with payrolls increasing 73,000 in July after the prior two months were revised down by nearly 260,000. In the last three months, employment growth has averaged 35,000. Money markets have now priced in two rate cuts this year, with a 90% chance of a reduction in September. BLOOMBERG