White House denies Bessent tipped to replace Fed Chair Powell
3 Min Read
The denial follows a Bloomberg report earlier the same day naming Bessent as a potential candidate, alongside former Fed governor Kevin Warsh.
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Treasury Secretary Scott Bessen arrives to testify before the House Committee on Appropriations, Subcommittee on Financial Services and General Government, oversight hearing of the US Department of the Treasury on Capitol Hill in Washington, Tuesday, May 6, 2025. (AP Photo/Jose Luis Magana)
The White House has dismissed reports that Treasury Secretary Scott Bessent is being considered to succeed Federal Reserve Chair Jerome Powell when his term ends in 2026, according to CNBC on Tuesday.
The denial follows a Bloomberg report earlier the same day naming Bessent as a potential candidate, alongside former Fed governor Kevin Warsh.
Bloomberg's report fueled speculation that President Donald Trump may be preparing to install a more dovish figure at the central bank amid ongoing frustrations with Powell's refusal to cut interest rates.
However, White House officials told reporters the claims were "false" and confirmed that no formal selection process has begun.
Trump has recently sharpened his public criticism of Powell. "It is costing the US a 'fortune,'" he said last week, referring to the Fed's decision to hold interest rates steady.
Since reassuming office, Trump has consistently pressured Powell to lower borrowing costs to stimulate economic growth, pressure that Powell has so far resisted.
Read more: Musk-Bessent clash turned physical in April
Succession speculation
In May, the Federal Reserve held interest rates within the 4.25% to 4.5% range, citing persistent inflation concerns.
Trump's dissatisfaction with that decision has renewed speculation about whether he may seek to replace Powell before the end of his term, or at least steer the nomination of a successor more aligned with his economic agenda.
Warsh, who was also mentioned in Bloomberg's report, is a known figure in Trump's economic circle. He previously met with Trump in November to discuss the Treasury Secretary role and has voiced criticism of the Fed's policy stance in recent years.
Though seen as more hawkish than Bessent, Warsh's past experience at the Fed could lend credibility to his candidacy should Trump choose to move in that direction.
Fed tensions
While Trump said last week that a decision on the Fed chairmanship would be announced "very soon," White House aides maintain that any claims about Bessent or Warsh are premature.
Analysts note that replacing Powell before his term ends in May 2026 would be legally and politically difficult, as the Federal Reserve Act only allows removal of a Fed chair "for cause."
Nevertheless, the pressure campaign has raised questions about the Fed's independence as the US approaches a volatile election cycle and economic crosswinds.
