Scott Bessent is studiously trying to avoid the fate of the last Treasury secretary who picked a Fed chair for President Donald Trump and now finds himself banished from the inner circle.
To escape Steven Mnuchin’s fate, Bessent — who begins interviewing candidates for the role this month — must balance Trump’s demands for a rate-cutting crusader against the need for the Fed chair to have the confidence and trust of financial markets.
Bessent has intentionally taken a more hands-off approach, compiling a list of nearly a dozen candidates, but is not expected to push any one candidate, as Mnuchin did when he pushed Chair Jerome Powell for the job in 2018. After interviewing those candidates, he plans to whittle down the list to a handful of top contenders, without any ranking or explicit preferences, according to people familiar with the process.
Bessent, says one former Trump official, wants Trump to own the final decision.
The Treasury Department did not respond to a request for comment.
Trump on Friday told reporters he “sort of” knows who he is going to pick, citing a “top three” list of National Economic Council Director Kevin Hassett, Fed Governor Christopher Waller and former Fed official Kevin Warsh.
“Bessent is smart to be more circumspect than Mnuchin was,” says Stephen Myrow, managing partner of Beacon Policy Advisors and a former Treasury official. “It’s a good survival strategy.”
Bessent sits in a powerful perch as one of the president’s most trusted Cabinet members, while also maintaining credibility on Wall Street. That makes him the natural choice as a key negotiator on tariffs talks and to head up the central bank chief interviews.
The Fed assignment is fraught with peril. Trump has said he wants the central bank to sharply cut interest rates by three percentage points. But investors worry such a drastic move could tip the bond markets into turmoil and cause inflation to surge.
Mnuchin’s Pick
Mnuchin engineered Powell’s ascension to Fed chair in 2018. But Trump quickly soured on that choice when the central bank raised interest rates despite his protests, publicly savaging Powell and blaming Mnuchin for having misled him.
“Trump would yell at him, and held him responsible for pushing him to appoint Jerome Powell,” said Art Laffer, an informal economic adviser to Trump and the economist whose supply-side theory guided Ronald Reagan’s tax cutting. “Mnuchin would sit there and be very stiff and quiver.”
Trump was so upset that he considered firing Mnuchin, who still managed to keep his job and ended up serving for all four years of the president’s first term.
A spokesperson Mnuchin declined to comment.
Trump’s resentment toward the Fed chair has only deepened in the nearly eight years since Powell first took the post. Trump has dubbed Powell “Too Late,” for what he calls a failure of moving quickly to cut interest rates. He’s mused about firing Powell, and is currently mired in a legal fight with Fed Governor Lisa Cook over his attempts to oust her over allegations of mortgage fraud.
Trump has sought to distance himself from his decision to elevate Powell to chair, saying in July that he was “surprised” the Fed chief was appointed to lead the central bank and blamed former President Joe Biden for his own pick.
The public assault on the Fed make Bessent’s job all the more difficult as he attempts to soothe markets and please a demanding boss.
His attempts to balance politics with economic realities come as bond markets are flashing concern that Trump’s push for aggressive interest rate cuts could reignite inflation, with 30-year Treasury yields not far from 5%.
Strategy Shift
Bessent’s actions suggests that he is trying to convey to the markets, the press and Congress that “there’s actually a process here and it’s not all on Trump’s whim,” said David Wessel, the director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.
Asked Sunday on NBC’s Meet the Press about Fed independence under a new chair, Bessent said, “We want someone who has an open mind and will factor in different policies.” He also noted that whoever the next chair is, “President Trump is going to make his views known.”
Allies of the Treasury secretary worry that his standing with Trump could quickly erode if the Fed pick does not lower interest rates fast enough, or adhere closely enough to his agenda.
Trump has twin goals of reducing costs for consumers and bringing down the cost of housing — two key metrics voters say will influence their decision in the 2026 midterm elections.
If Bessent’s selection process produces a Fed chair who delivers positive results, his standing in the Trump administration will likely be further enhanced.
If it doesn’t, however, there are plenty of skeptics who don’t believe he’ll be able to avoid the blow-back, despite the efforts he’s made.
“Anybody who thinks Trump is going to be loyal to them has not been paying attention,” Wessel said.
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