"Trump is strongly considering Bessent as the next Fed Chair"

Loyalty to Trump + extremely dovish stance

Kevin Warsh leads in monetary policy expertise

Whoever is appointed is likely to face questions about Fed independence

It has been reported that the Trump administration is strongly considering Scott Bessent, Secretary of the Treasury, as a leading candidate for the next Chair of the Federal Reserve Board.

According to Bloomberg on the 11th (local time), advisers close to President Trump are moving to nominate Secretary of the Treasury Scott Bessent for the next Fed Chair. Jerome Powell, the current Fed Chair, has a term set to expire in June of next year.

President Trump said last Friday he would nominate a replacement for Powell "very quickly" after Powell's term ends in May next year.

The list of candidates under consideration includes Kevin Warsh, a former Fed official whom President Trump interviewed last November for the Treasury Secretary position.

Billionaire investor Paul Tudor Jones, in an interview with Bloomberg TV on the 11th, also stated that Trump is likely to appoint an "extremely dovish" Fed Chair who would help support his growth policies. In this case, Treasury Secretary Scott Bessent would be his choice. He added that President Trump values loyalty, making Bessent a stronger candidate.

Jones, CEO of Tudor Investment, which manages a $16 billion macro hedge fund, commented, however, that Trump's tax cut law could pose risks for the stock and bond markets in the future.

Bessent is at the forefront of the US-China Trade Agreement negotiations, which Trump values highly. Steve Bannon, former White House Chief Strategist and outside advisor to the President, commented, "Scott Bessent proved he could execute President Trump's agenda during the tumultuous first six months."

Arthur Laffer, an economist and close associate of Trump, said, however, "Bessent is excellent, but monetary policy is not his specialty," adding, "As I told the President, Kevin Warsh is the perfect fit." When asked about Warsh last Friday, President Trump replied, "He is held in very high regard."

The President, who nominated Powell in 2017, has repeatedly complained that Powell was too passive in lowering rates. At a White House meeting last month, Trump called on Powell to cut rates.

Chair Powell and Fed officials have maintained this year's rate at current levels, insisting that a patient approach is warranted amid economic uncertainty stemming from tariffs. Fed officials note that tariffs pose a burden to economic growth and could fuel inflation.

Other individuals already mentioned as Fed Chair candidates include Kevin Hassett, Chairman of the White House National Economic Council; Christopher Waller, current Fed Governor; and David Malpass, former President of the World Bank.

Bloomberg pointed out that whoever is appointed will face questions about political independence and the challenge of proving the institution's autonomy. President Trump has repeatedly asserted that Powell's decision not to cut rates was a mistake and has claimed he should have a say in rate decisions, thus having acted several times in ways that undermine the Fed's independence.

Kim Jung-ah, Guest Reporter kja@hankyung.com