Here's What Bessent Said About Fed Chair Powell On Wednesday Morning: ‘There Are Some Great Candidates’

U.S. Treasury Secretary Scott Bessent said on Wednesday that the Federal Reserve’s assessment of the inflationary impact of tariffs may be flawed, and confirmed that President Donald Trump is beginning the search for a new Federal Reserve Chair to replace Jerome Powell when his term expires in May 2026.

U.S. equity markets were in the green in early morning trade. The SPDR S&P 500 ETF Trust (SPY) was up 0.4% and the SPDR Dow Jones Industrial Average ETF (DIA) gained over 0.5%. The Invesco QQQ Series 1 Trust (QQQ), which tracks the Nasdaq-100,  climbed 0.18% on Wednesday morning. 

On Stocktwits, retail sentiment around SPY has remained in ‘neutral’ territory over the past day, while retail sentiment around DIA dipped to the ‘bearish’ zone from ‘neutral’.

“I’m not really sure what the Federal Reserve is looking at,” Bessent said in an interview with Bloomberg. “Thus far, we’ve seen very little, if any, price pressure from the tariffs. And even if we were to see that, it would not be inflationary — it would be a one-time price adjustment. I think their analysis of tariffs is a bit off.”

The Federal Reserve has previously suggested that new tariffs could risk pushing up prices, particularly if supply chains are disrupted or retaliatory measures reduce U.S. exports.

On the subject of Powell’s replacement, Bessent said Trump is in the early stages of evaluating options and emphasized that the process will be deliberate. “We are getting the process underway. It’s going to be President Trump’s decision. We’re not in a rush,” he said.

“There’s a long list. Like I said, there are some great candidates,” Bessent added, citing that options included individuals either on the Fed Board or presidents of regional banks. “I’m not going to name names.”

He also reiterated that the Federal Reserve should conduct an internal review, separating monetary policy from other aspects. According to him, the “mission creep” from the Fed is endangering its independence of monetary policy.

“An internal review would be a good start,” said Bessent during the interview. 

He also stated that Trump is usually two to three steps ahead of the market, while the market wants instant explanations. “He always has a plan, it’s not always obvious,” he said.

Read also: Bessent Says EU’s Tariff Threat Just A Negotiating Tactic, US Making Progress With Beijing: ‘We Don’t Want To Decouple From China'

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