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<\/iframe><\/div>\n<div id=\"article-body\">\n<p>US Treasury secretary Scott Bessent grilled contenders to lead the Federal Reserve about their stance on interest rates and the unwinding of crisis-era stimulus, as Donald Trump\u2019s administration seeks to replace chair Jay Powell.<\/p>\n<p>Weeks of meetings with a longlist of 11 candidates concluded on Tuesday, according to several people involved in the process. Candidates said they were grilled for up to two hours by Bessent, Treasury official Hunter McMaster and adviser Francis Browne.<\/p>\n<p>Some of those interviewed said Bessent asked their opinion on issues he raised in a recent article that called for sweeping reforms of the central bank and criticised its quantitative easing programmes as a \u201cgain-of-function monetary policy experiment\u201d.<\/p>\n<p>The candidates were also asked how they would handle governance of an institution Bessent has accused of \u201cmission creep\u201d, the people said.<\/p>\n<p>The hunt to find a replacement for Powell as chair of the world\u2019s most important financial institution comes during a period of turmoil for the <a href=\"https:\/\/www.ft.com\/federal-reserve\" data-trackable=\"link\">Fed<\/a>, after Trump installed <a href=\"https:\/\/www.ft.com\/content\/807d060c-3090-4952-8fe6-bd389390e74e\" data-trackable=\"link\">one ally as governor<\/a> and has sought to fire another \u2014 raising fears the president will compromise the central bank\u2019s independence.<\/p>\n<p>Trump has called for the Fed to cut its benchmark interest rates to as low as 1 per cent from the current range of 4 per cent to 4.25 per cent. <\/p>\n<p>Trump, who will have the final say after the final round of interviews, has said his favourites are former Fed governor Kevin Warsh, current governor <a href=\"https:\/\/www.ft.com\/content\/9a0c2ff7-bfdc-4bbb-8dcd-622e1c4df313\" data-trackable=\"link\">Christopher Waller<\/a> and Kevin Hassett, one of the president\u2019s economic advisers. <\/p>\n<p>Rick Rieder, BlackRock\u2019s chief investment officer of global fixed Income and an outside bet for the role, performed \u201cvery well\u201d, said a person familiar with the discussions. <\/p>\n<p>Bessent has been tight-lipped on the process, saying in a recent Fox Business interview he wanted someone with \u201can open mind\u201d who was \u201clooking forward\u201d. <\/p>\n<p>The Treasury department did not respond to a request for comment. <\/p>\n<p>He acknowledged last month that the strength of some of the candidates\u2019 performances had come as a surprise, leaving the Treasury secretary struggling to whittle down the list to present to the White House. <\/p>\n<p>Powell is set to step down as chair in May 2026, ending his eight-year stint as the world\u2019s most important central banker. He could remain as governor until January 2028.<\/p>\n<p>His final stretch at the helm has been marred by attacks from Trump, who has labelled the man he picked to run the central bank a \u201cmoron\u201d who has been \u201ctoo late\u201d to change monetary policy. <\/p>\n<p>The Treasury secretary, who regularly meets the Fed chair for breakfast, is seen as a more moderate figure than some of Trump\u2019s allies and has at times restrained the president from trying to fire Powell. <\/p>\n<p>But last month Bessent published an almost 6,000 word essay for trade publication International Economy in which he criticised the performance of the central bank. <\/p>\n<p>Bessent considers the Fed\u2019s bloated balance sheet as reflective of the central bank\u2019s over-reach, and argued its technocrats should hold less sway over government bond markets, handing the Treasury more control.<\/p>\n<p>Warsh echoed those views in a speech in April to the Group of 30, an organisation composed of financiers and academics.<\/p>\n<p>More recently, several other candidates \u2014 including Waller \u2014 have outlined how they would reduce the size of the Fed\u2019s asset holdings, which ballooned as the central bank bought Treasuries and other securities during the financial crisis and the Covid-19 pandemic. <\/p>\n<p>Bessent\u2019s accusations in the article for International Economy have rankled senior Fed officials involved in the asset purchase programmes. <\/p>\n<p>They say that, while QE had driven up the price of assets disproportionately held by wealthy Americans, without the policies unemployment would have probably surged \u2014 hitting the poorest hardest. <\/p>\n<p>The president\u2019s agenda for the Fed appears at odds with Bessent\u2019s focus on the balance sheet and the side-effects of QE. <\/p>\n<div class=\"n-content-layout\" data-component=\"flourish\" data-component-id=\"24652327\" data-component-type=\"flourish-in-article\">\n<figure class=\"n-content-picture n-content-layout__container\"><a href=\"#24652327\"><picture data-asset-type=\"flourish\" data-flourish-id=\"24652327\" data-flourish-type=\"visualisation\">\n<div id=\"24652327\" class=\"cp-message o-message o-message--inform o-message--notice\" data-o-component=\"o-message\">\n<div class=\"o-message__container\">\n<div class=\"o-message__content\">\n<p class=\"o-message__content-main\">Some content could not load. Check your internet connection or browser settings.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><\/picture><\/a><\/figure>\n<\/div>\n<p>Trump has made clear he views by far the most important criterion for Powell\u2019s replacement is a willingness to aggressively cut borrowing costs. <\/p>\n<p>The administration\u2019s repeated attacks on the central bank\u2019s long-held <a href=\"https:\/\/www.ft.com\/content\/7b79c40b-47d4-489a-ad34-abdead76506c\" data-trackable=\"link\">independence<\/a> to set interest rates as it sees fit has sparked market jitters \u2014 along with bets that the next Fed chair will more aggressively cut borrowing costs. <\/p>\n<aside aria-labelledby=\"aside-label\" class=\"n-content-recommended--single-story n-content-recommended--inset\" data-component=\"recommended\">\n<p class=\"n-content-recommended__title o3-type-body-highlight\">Recommended<\/p>\n<div class=\"o-teaser o-teaser--article o-teaser--small o-teaser--stacked o-teaser--has-image o-teaser--opinion js-teaser\" data-id=\"9cdbc04f-6396-4a65-a983-cd497d77b927\">\n<div class=\"o-teaser__image-container js-teaser-image-container\"><a href=\"https:\/\/www.ft.com\/content\/9cdbc04f-6396-4a65-a983-cd497d77b927\" data-trackable=\"image-link\" data-trackable-context-story-link=\"image-link\" tabindex=\"-1\" aria-hidden=\"true\"><\/p>\n<div class=\"o-teaser__image-placeholder\" style=\"aspect-ratio:2493\/1402\"><img decoding=\"async\" class=\"o-teaser__image\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fimages.ft.com%2Fv3%2Fimage%2Fraw%2Fhttps%253A%252F%252Fd1e00ek4ebabms.cloudfront.net%252Fproduction%252Fce50d3f7-70ad-4931-ae31-6ddc80455b9e.jpg%3Fsource%3Dnext-article%26fit%3Dscale-down%26quality%3Dhighest%26width%3D700%26dpr%3D1?source=next&fit=scale-down&dpr=2&width=240\" alt=\"Close up of Jay Powell\u2019s face looking pensive\"\/><\/div>\n<p><\/a><\/div>\n<\/div>\n<\/aside>\n<p>Trump ally Russ Vought, director of the Office of Management and Budget, has also railed against what he has claimed is an \u201costentatious\u201d $2.5bn renovation of the Fed\u2019s headquarters. <\/p>\n<p>Another member of the president\u2019s inner circle, Bill Pulte, has accused Lisa Cook, the Fed\u2019s first black female governor, of mortgage fraud \u2014 prompting Trump to try to fire her. <\/p>\n<p>Cook has denied the charges and is suing the president, with the <a href=\"https:\/\/www.ft.com\/content\/0430b348-d7da-439c-aa31-f8c0fedec9d3\" data-trackable=\"link\">Supreme Court<\/a> saying last week she could continue working at the Fed until at least January 2026. <\/p>\n<p><em>Data visualisation by Carolina Vargas and Ian Hodgson<\/em><\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/68755ca1-48f9-49e2-ab54-a1b35edf6e9c\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the White House Watch newsletter for free Your guide to what Trump\u2019s second term means for Washington,…\n","protected":false},"author":6,"featured_media":36575,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-36574","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/36574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36574"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/36574\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/36575"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}