U.S. Treasury Secretary to meet with Walsh, Lindsay, and Bullard this week as the search for the next Fed Chair continues.

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The search for the next Federal Reserve Chair is underway, with U.S. Treasury Secretary Scott Bessent leading the process of meeting with several candidates on President Trump’s shortlist.

According to media reports citing a U.S. Treasury official, Bessent recently met with former Fed officials Lawrence Lindsey, Kevin Warsh, and James Bullard. Lindsey and Warsh both previously served as Fed Governors, while Bullard is the former President of the St. Louis Fed. The goal is to add one or two more candidates to those already mentioned by Trump.

The current list includes Warsh, National Economic Council Director Kevin Hassett, and current Fed Governor Christopher Waller. At the same time, Bessent is also considering a broader pool, which encompasses 11 economists, including former and current Fed officials as well as some market strategists.

Besides interviewing candidates, Bessent is also pushing his own agenda for Fed reform. According to sources, he wants the Fed to naturally reduce its massive balance sheet holdings, especially $6 trillion in U.S. Treasuries and mortgage-backed securities (MBS), in a way that does not "disrupt markets or the economy." In addition, Bessent aims to further shrink the Fed’s “footprint” in the economy.

This news comes at a time when the Fed is under close scrutiny from the White House.

Trump and other senior government officials have consistently called for the Fed to cut interest rates, but there has been no rate cut since December 2024. The market widely expects the Fed to cut rates by 25 basis points at next week’s policy meeting.

Last week, Bessent penned an op-ed in The Wall Street Journal outlining his views on the Fed. He criticized the Fed for so-called “mission creep,” that is, repeatedly overstepping its narrow mandate to maintain low unemployment and low inflation. “The Fed must change course. Its standard toolkit has become overly complex and is not theoretically solid enough.”

Industry observers generally expect major changes at the Fed over the coming year:

Fed Chair Jerome Powell’s term will expire in May 2026. Although he can remain as a board governor for two more years, he is certain to be replaced as Fed Chair.

Meanwhile, the U.S. Senate is expected to vote next Monday on the nomination of Stephen Miran to fill a vacant seat on the Federal Reserve Board.

In addition, Trump is also pushing to remove Fed Governor Lisa Cook, citing alleged mortgage fraud. However, courts have so far blocked him from doing so.

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