Trump Considers Bessent for Fed Chair as Inflation Rises Amid Tariff Plans

U.S. President Donald Trump on Tuesday floated Treasury Secretary Scott Bessent as a possible successor to Federal Reserve Chair Jerome Powell, though he noted satisfaction with Bessent’s current role. Speaking at Joint Base Andrews, Trump told reporters, “(Bessent) is an option, and he’s very good. Well, he’s not, because I like the job he’s doing, right?”

Trump’s remark adds to growing speculation around the Fed leadership as reports suggest former Fed Governor Kevin Warsh and economic advisor Kevin Hassett are also under consideration to replace Powell. Tensions between Trump and Powell have persisted, with the President frequently pressuring the Fed to lower interest rates, warning of potential economic fallout if it fails to do so.

Powell has resisted calls for aggressive rate cuts, citing ongoing uncertainty around inflation—particularly due to Trump's trade policies. On Tuesday, Trump reinforced his tariff strategy, saying a proposed 200% duty on pharmaceutical imports is expected by month-end. His broader tariff package targeting major U.S. trade partners is scheduled to begin August 1.

These remarks followed the release of June’s Consumer Price Index (CPI) data, which revealed a rise in inflation. Economists caution that Trump's tariffs, combined with shrinking inventory levels among U.S. businesses, could lead to higher consumer prices, potentially fueling inflation further in the coming months.

As Trump doubles down on protectionist trade measures and weighs leadership changes at the Fed, markets are bracing for policy shifts that could significantly impact inflation, interest rates, and overall economic stability.