• Treasury Secretary Scott Bessent is finalizing interviews with five candidates to replace Jerome Powell, with a potential selection by President Trump before Christmas.
  • Bessent is advocating for a fundamental shift at the Fed, criticizing its current "ample reserves" system as overly complex and calling for a return to a simpler, more traditional role.
  • The finalists include Fed Governors Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh, White House adviser Kevin Hassett, and BlackRock's Rick Rieder.

Treasury Secretary Scott Bessent is putting the final touches on his review of candidates to lead the Federal Reserve, telling CNBC that President Trump could name the next chair before the holidays. The selection process, which Bessent is leading, has narrowed to a slate of five contenders to succeed Jerome Powell when his term expires in May 2026.

Bessent’s public comments reveal a clear agenda for the institution's future. "We’ve got to simplify things," he stated, taking direct aim at the central bank's current operational framework. He has been a vocal critic of what he describes as the Fed's maintenance of overly complex policies, particularly the "ample reserves" system implemented following the 2008 financial crisis. According to people familiar with his thinking, Bessent believes the Fed should scale back its "distortionary impact on markets" and end the use of emergency-era tools like Treasury bond purchases for influencing long-term rates.

The final candidate pool represents a mix of Washington insiders and external perspectives. The frontrunner, according to analysts, is Kevin Hassett, the former chair of the White House's National Economic Council, whose long-standing loyalty to Trump gives him an edge. Federal Reserve Governor Christopher Waller is also considered a strong contender, known as an independent thinker within the system who has recently expressed interest in the implications of cryptocurrency.

Other candidates include former Fed Governor Kevin Warsh, a monetary policy hawk whose past critiques of the Fed's expansion align closely with Bessent's own views, and Rick Rieder, the BlackRock senior managing director who would bring a deep Wall Street pedigree. The final candidate, Fed Vice Chair for Supervision Michelle Bowman, has demonstrated a willingness to challenge consensus but is viewed as a longshot.

Efforts to reach representatives for the candidates were not immediately successful. A Treasury spokesperson declined to comment beyond the Secretary's televised remarks.

The timeline is accelerating. Bessent indicated he would present a refined list to Trump immediately after the Thanksgiving holiday, setting the stage for a year-end decision. The outcome will determine whether the world's most powerful central bank maintains its current course or embarks on the significant operational simplification that Bessent is demanding.