Treasury Secretary Scott Bessent outlined the qualities that he thinks the next Federal Reserve Chair should possess in an interview with Nikkei on Thursday.
Calls For Market Confidence And Forward-Looking Leadership
According to Bessent, Jerome Powell’s successor should instill confidence in the markets. “It’s someone who has to have the confidence of the markets, the ability to analyze complex economic data,” adding that he thinks the next chair should be “very attuned to forward thinking, as opposed to relying on historical data.”
Bessent also notes that there are 12 votes in the Federal Reserve, which are required for all monetary policy decisions, so he believes the right candidate should be able to “manage that and build consensus.”
This comes as Powell’s term is set to come to an end in May 2026, with Bessent leading the search for a new chair. Potential candidates include prominent figures such as St. Louis Fed President James Bullard and Marc Sumerlin, who was an economic advisor to former President George W. Bush.
Warns of Mission Creep Threatening Fed’s Independence
Bessent says that the Fed’s “independence is essential” for the smooth functioning of the economy, as well as for inflation expectations, but believes that this independence is “at risk,” primarily due to the central bank’s mission creep. This refers to its involvement in areas beyond just monetary policy.
He stressed that the Fed remains an independent institution despite political criticism. “President Trump makes his opinion known. Senator [Elizabeth] Warren makes her opinion known. But at the end of the day, the Fed is independent,” Bessent said.
President Donald Trump has criticized the Fed regarding its “mission creep,” and the effectiveness of its officials in recent weeks. This led to economists such as Mohamed El-Erian calling for Powell’s resignation, in the interest of safeguarding the Fed’s operational autonomy.
Photo Courtesy: Maxim Elramsisy On Shutterstock.com
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