Background on Jerome Powell and the Search for a Successor
Jerome Powell, the current Chair of the Federal Reserve (Fed), has been leading the U.S. central bank since February 2018. His term is set to expire in February 2022, prompting the search for his successor. Scott Bessent, the U.S. Secretary of the Treasury, has announced that he will interview multiple candidates in the coming week to replace Powell.
Who is Scott Bessent?
Scott M. Bessent is the 41st and current United States Secretary of the Treasury, serving under President Joe Biden. Appointed in March 2021, Bessent brings extensive experience in finance and public service to the role. His background includes serving as a senior advisor at the International Monetary Fund (IMF) and working in various capacities within the U.S. Department of the Treasury.
The Search for a New Fed Chair
Bessent stated in an interview with Fox Business Network’s “Mornings with Maria” on September 24 that he aims to complete the first round of interviews by early October. He expressed his desire for a candidate with an open mind to lead the U.S. central bank, echoing previous criticisms of Powell for not cutting interest rates sooner.
Bessent highlighted Stephen Miran, a recent addition to the Federal Reserve Board chosen by former President Donald Trump, for advocating a 50 basis points rate cut—greater than the agreed-upon 25 basis points reduction.
Bessent expressed surprise that the Fed had not outlined a target for rate reduction by year-end, given recent downward revisions in employment data.
Powell’s Balancing Act
On Tuesday, Powell stated that the Fed must continue balancing the risks of high inflation and a weakening labor market in upcoming interest rate decisions, as his colleagues presented arguments for and against political divisions.
“These meetings are meant to be a space for debate. You’re supposed to come with an open mind,” Bessent said, drawing parallels to the United Nations. “We’ve seen many mistakes and rigidity, so it’s beneficial to have fresh perspectives in that arena.”
Bessent plans a second round of interviews before presenting President Biden with a shortlist of three to four strong candidates.
Key Questions and Answers
- Who is Scott Bessent, and what is his role? Scott M. Bessent is the U.S. Secretary of the Treasury, responsible for advising the President on economic and financial matters.
- Why is there a search for a new Fed Chair? Jerome Powell’s term as Fed Chair ends in February 2022, prompting the search for his successor.
- What qualities is Bessent looking for in a candidate? Bessent seeks an open-minded individual to lead the Fed, emphasizing the importance of balancing economic risks.
- Who is Stephen Miran, and what are his views? Stephen Miran is a recent addition to the Federal Reserve Board, advocating for a more aggressive rate cut than the agreed-upon reduction.
- What is Bessent’s plan for selecting a new Fed Chair? Bessent intends to conduct interviews and present President Biden with a shortlist of strong candidates.
