Trump to Appoint New Fed Chair Replacing Jerome Powell This Month

Decision Expected Before Davos Forum

US Treasury Secretary Scott Bessent has indicated that President Donald Trump is expected to make a decision regarding the replacement of Federal Reserve Chair Jerome Powell this month. The announcement is likely to come either just before or after the annual Davos forum, scheduled from January 19-23, 2026. Bessent revealed that there are currently four candidates being considered for the position: Director of the National Economic Council Kevin Hassett, former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, and BlackRock executive Rick Rieder.

Candidate Profiles and Considerations

Among the candidates, Rick Rieder is noted as the only one still awaiting an interview. Notably, Rieder is also the only candidate without prior experience at the Federal Reserve. Bessent emphasized that this factor could be either a positive or negative aspect, as the decision ultimately rests with President Trump.

Monetary Policy and Interest Rate Discussion

Regarding current monetary policy, Bessent expressed his view that interest rates remain too high, stating that the economy is still in a restrictive mode. He suggested that most models indicate an ideal interest rate range of 2.50%-3.25%. This view comes after the Fed's recent decision to cut its benchmark interest rate to a range of 3.5%-3.75%. However, Fed Chair Jerome Powell did not signal further rate cuts in the near future.

Market Expectations and Upcoming Fed Meeting

The Fed is set to meet again on January 27-28, 2026. Market futures currently indicate a low probability of rate changes during this meeting, as more Fed officials are opting to maintain current rates until additional data on inflation and the labor market becomes available.

Broader Economic Context and Tax Reporting

Bessent also used his recent speech at the Economic Club of Minnesota to promote Trump's economic agenda, highlighting the positive impact of last year's tax cuts, trade agreements, and deregulation efforts. He contrasted this with criticism of the previous administration's economic policies, which he claimed weakened the economy through weak trade policies, high taxes, and burdensome regulations. Additionally, Bessent announced that this year's tax reporting season will begin on January 26, 2026, marking one of the earliest starts in over a decade.