Title: Succession at the Federal Reserve: Treasury Secretary Confirms Search for Next Chair

Scott Bessent, the Secretary of the Treasury, made headlines this week by confirming for the first time that the formal process to find a successor for Jerome Powell as Federal Reserve chair is now officially under way. In a live interview with Bloomberg, Bessent explained that active efforts are ongoing to select the next leader for what is widely recognized as the world’s most influential central bank. Powell’s term is up in 2026, but speculation over his future has been building for months. Bessent told Bloomberg that conversations about replacing Powell are already taking place at high levels and emphasized that there are strong candidates within and outside of the Federal Reserve system.

One of the more notable aspects of Bessent’s appearance was his suggestion that Powell, once his term as chair ends, should consider also stepping down from his role as a Fed governor. According to Bessent, this would help avoid confusion in financial markets. He argued that tradition has seen outgoing Fed chairs depart from both posts, and that lingering as a former chair but remaining as a governor risks creating a so-called shadow chair dynamic, which could disrupt market expectations and clarity.

Bessent also addressed speculation that former President Trump, who has voiced criticisms of Powell in the past, might intervene to remove him early. Bessent pointed out that Trump has consistently stated he does not intend to fire Powell before his current term concludes. The interview caused an immediate stir among investors. Just after Bessent’s remarks, yields on two-year U.S. Treasury notes climbed higher, a reflection of market participants rethinking the potential trajectory of monetary policy and trying to anticipate what kind of leadership a new Fed chair might bring.

While some media outlets have floated Bessent himself as a possible Fed chair candidate, he was quick to deny this, stating that his role is to be part of the decision-making process rather than a contender for the top job. Several other names are believed to be in contention, including Kevin Warsh, a former Fed governor, and Michelle Bowman, who is currently serving as Fed vice chair.

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