President Donald Trump announced on Thursday that he has completed the candidate interview process for the next Federal Reserve chair position and confirmed he has made his selection. Speaking to reporters on January 22, Trump indicated that an official announcement would come soon, likely before the end of January.

Selection Process Complete

Trump provided limited details about his chosen candidate while emphasizing their qualifications and reputation. The President described his selection in positive terms but maintained secrecy around the specific identity.

"I'll be telling you soon. I have somebody that I think will be very good, but I'm not going to reveal it," Trump told reporters. "It's someone very respected, very, very well known, and will do, I think, a very good job," he added.

Reported Candidate Shortlist

According to Bloomberg reports, Trump's consideration list includes several prominent financial and economic figures. The shortlist represents a mix of current government officials, Federal Reserve insiders, and private sector executives.

The reported candidates include:

• Kevin Hassett: National Economic Council Director
• Rick Rieder: BlackRock executive
• Christopher Waller: Current Federal Reserve Governor
• Kevin Warsh: Former Federal Reserve Governor

Federal Reserve Leadership Context

The announcement comes during a period of increased presidential commentary on Federal Reserve operations and monetary policy decisions. Trump has become more vocal about exerting influence over the Federal Reserve, including criticism of current officials and advocacy for presidential input on interest-rate decisions. This approach represents Trump's broader strategy of shaping the institution through his appointment powers and public statements regarding monetary policy direction.

The US Federal Reserve is expected to maintain its benchmark interest rate unchanged through the current quarter and potentially until Chair Jerome Powell's term ends in May, marking a notable shift in economic expectations. According to a Reuters survey of 100 economists conducted between January 16-21, this represents a significant change from predictions made just a month ago when most economists had anticipated at least one rate cut by March.

Current Rate Expectations

All surveyed economists expect the Federal Reserve to hold rates steady at the upcoming January 27-28 policy meeting. The current rate environment and economist predictions show a clear trend toward maintaining the status quo.

The reassessment reflects growing confidence that the US economy will continue expanding at a solid pace, reducing the urgency for near-term monetary easing even as inflation remains above the Fed's 2% target.

Economic Growth Projections

The US economy continues to outperform expectations, with robust growth figures supporting the case for maintaining current interest rates. After growing at an annualized pace of 4.3% in the third quarter, economic expansion projections have been revised upward.

Some economists anticipate even stronger momentum, driven by increased investment in artificial intelligence and the impact of recent fiscal measures, including tax cuts. These factors are expected to provide a meaningful boost to GDP growth this year.

Inflation and Employment Outlook

Despite strong economic growth, inflation concerns persist as a key factor in Federal Reserve decision-making. The Personal Consumption Expenditures index, the Fed's preferred inflation gauge, is expected to remain above the 2% target for the rest of this year and average above that level through 2028.

The unemployment rate is forecast to remain relatively stable, averaging around 4.5% this year, suggesting continued resilience in the US labor market even as monetary policy stays restrictive.

Political Pressures and Leadership Transition

Concerns are rising in financial markets and policymaking circles over political pressure on the Federal Reserve's independence. President Donald Trump has repeatedly criticized Powell for not cutting rates more aggressively, while the Justice Department has threatened a criminal investigation into Powell related to renovations at the Federal Reserve's headquarters.

Additionally, Trump's attempt to remove Fed Governor Lisa Cook is awaiting a Supreme Court hearing. Treasury Secretary Scott Bessent has indicated that President Trump could announce the next Fed chair as early as next week, adding to uncertainty surrounding the leadership transition.

Future Policy Direction

While there is no clear consensus on policy beyond the near term, a slight majority of respondents expect rate cuts to resume after Powell's tenure concludes in May. Most economists still anticipate at least two rate cuts later in the year, though political scrutiny surrounding the leadership transition could complicate efforts to steer policy in a more accommodative direction.

The lack of unity among policymakers has added to uncertainty over the future rate path, with economists highlighting that political pressures may influence the timing and magnitude of future monetary policy adjustments.