Trump to choose Jerome Powell's successor soon: Who is the leading candidate?
US President Donald Trump has unveiled the expected timeline for announcing who will lead the world’s most important financial institution, confirming that he will likely reveal, at the beginning of next year, the name of the candidate who will succeed Jerome Powell as chairman of the Federal Reserve (the US central bank).
Trump's remarks came during a meeting of his administration on Tuesday, where he stated, "We will probably announce early next year who will be the next Federal Reserve chairman." This comes as global markets await any clues about the future of US monetary policy.
Candidate list: Hassett in the lead
In discussing the internal details of the selection process, the US president reiterated that he had offered the sensitive position to the current Treasury Secretary, Scott Bessent, but the latter declined. Consequently, reports and predictions from the White House indicate that Kevin Hassett, Trump's chief economic advisor, is currently the frontrunner for this leadership role.
Trump explained that his administration had been studying the files of 10 potential candidates very carefully, noting that the list had been greatly reduced and only one option remained under final review, suggesting that a decision was imminent.
Historical context and relationship with Powell
The current chairman, Jerome Powell, will complete his term in the spring of 2026. It's worth noting that Trump appointed Powell in 2017 during his first presidential term. However, the relationship between the two men has been marked by public tension, with Trump repeatedly expressing his desire to change the central bank's leadership during his second, non-consecutive term, amidst constitutional and legal debate surrounding the president's authority to dismiss the Federal Reserve chairman before the end of his term.
The confirmation of Trump's new nominee requires Senate approval, which is currently controlled by Republicans, potentially streamlining the process compared to other political circumstances. The anticipated announcement in 2026 is seen as a tactical postponement of this strategic matter, which the administration has been working on for months.
The importance of the position and its global and regional influence
The selection of the Federal Reserve Chair has far-reaching implications beyond the United States, impacting the entire global economy. The Fed controls interest rates for the US dollar, a tool that directly influences borrowing costs, inflation rates, and global investment flows.
Regionally, these appointments are of paramount importance to the Gulf and Middle Eastern states, given that most of the region's currencies are pegged to the US dollar. Any shift in monetary policy (whether towards tightening or easing) is immediately reflected in the monetary policies of the region's central banks and directly impacts the pricing of dollar-denominated commodities, most notably oil and gold.
