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US Treasury secretary Scott Bessent grilled contenders to lead the Federal Reserve about their stance on interest rates and the unwinding of crisis-era stimulus, as Donald Trump’s administration seeks to replace chair Jay Powell.
Weeks of meetings with a longlist of 11 candidates concluded on Tuesday, according to several people involved in the process. Candidates said they were grilled for up to two hours by Bessent, Treasury official Hunter McMaster and adviser Francis Browne.
Some of those interviewed said Bessent asked their opinion on issues he raised in a recent article that called for sweeping reforms of the central bank and criticised its quantitative easing programmes as a “gain-of-function monetary policy experiment”.
The candidates were also asked how they would handle governance of an institution Bessent has accused of “mission creep”, the people said.
The hunt to find a replacement for Powell as chair of the world’s most important financial institution comes during a period of turmoil for the Fed, after Trump installed one ally as governor and has sought to fire another — raising fears the president will compromise the central bank’s independence.
Trump has called for the Fed to cut its benchmark interest rates to as low as 1 per cent from the current range of 4 per cent to 4.25 per cent.
Trump, who will have the final say after the final round of interviews, has said his favourites are former Fed governor Kevin Warsh, current governor Christopher Waller and Kevin Hassett, one of the president’s economic advisers.
Rick Rieder, BlackRock’s chief investment officer of global fixed Income and an outside bet for the role, performed “very well”, said a person familiar with the discussions.
Bessent has been tight-lipped on the process, saying in a recent Fox Business interview he wanted someone with “an open mind” who was “looking forward”.
The Treasury department did not respond to a request for comment.
He acknowledged last month that the strength of some of the candidates’ performances had come as a surprise, leaving the Treasury secretary struggling to whittle down the list to present to the White House.
Powell is set to step down as chair in May 2026, ending his eight-year stint as the world’s most important central banker. He could remain as governor until January 2028.
His final stretch at the helm has been marred by attacks from Trump, who has labelled the man he picked to run the central bank a “moron” who has been “too late” to change monetary policy.
The Treasury secretary, who regularly meets the Fed chair for breakfast, is seen as a more moderate figure than some of Trump’s allies and has at times restrained the president from trying to fire Powell.
But last month Bessent published an almost 6,000 word essay for trade publication International Economy in which he criticised the performance of the central bank.
Bessent considers the Fed’s bloated balance sheet as reflective of the central bank’s over-reach, and argued its technocrats should hold less sway over government bond markets, handing the Treasury more control.
Warsh echoed those views in a speech in April to the Group of 30, an organisation composed of financiers and academics.
More recently, several other candidates — including Waller — have outlined how they would reduce the size of the Fed’s asset holdings, which ballooned as the central bank bought Treasuries and other securities during the financial crisis and the Covid-19 pandemic.
Bessent’s accusations in the article for International Economy have rankled senior Fed officials involved in the asset purchase programmes.
They say that, while QE had driven up the price of assets disproportionately held by wealthy Americans, without the policies unemployment would have probably surged — hitting the poorest hardest.
The president’s agenda for the Fed appears at odds with Bessent’s focus on the balance sheet and the side-effects of QE.
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Trump has made clear he views by far the most important criterion for Powell’s replacement is a willingness to aggressively cut borrowing costs.
The administration’s repeated attacks on the central bank’s long-held independence to set interest rates as it sees fit has sparked market jitters — along with bets that the next Fed chair will more aggressively cut borrowing costs.
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Trump ally Russ Vought, director of the Office of Management and Budget, has also railed against what he has claimed is an “ostentatious” $2.5bn renovation of the Fed’s headquarters.
Another member of the president’s inner circle, Bill Pulte, has accused Lisa Cook, the Fed’s first black female governor, of mortgage fraud — prompting Trump to try to fire her.
Cook has denied the charges and is suing the president, with the Supreme Court saying last week she could continue working at the Fed until at least January 2026.
Data visualisation by Carolina Vargas and Ian Hodgson
