Trump says he may be down to one candidate to head the Fed

By Steve Holland

DAVOS, Switzerland, Jan 21 (Reuters) – U.S. President Donald Trump on Wednesday indicated he was close to choosing the new chair of the Federal Reserve, adding he liked the idea of keeping White House economic adviser Kevin Hassett in his current post.

“We’re down to three, but we’re down to two. And I probably can tell you we’re down to maybe one in my mind,” he told CNBC in Davos, when asked who would replace current Chair Jerome Powell, a frequent target of Trump’s ire.

Asked about Hassett, Trump said: “I’d like to actually keep him where he is if you want to know the truth. I don’t want to lose him. He’s so good on television.”

Trump said all three candidates were good, adding that BlackRock’s chief bond investment manager, Rick Rieder, had been “very impressive” in his interview.

The other two candidates named by Trump and his top aides are Fed Governor Christopher Waller and former Fed Governor Kevin Warsh. On Tuesday, Treasury Secretary Scott Bessent said the president had whittled down the field to four candidates.

Trump renewed his criticism of Powell for waiting too long to cut interest rates and for his overall leadership of the Fed.

Asked about Bessent as a possible contender, Trump called him fantastic but repeated that the Treasury chief wanted to stay in his current job. Bessent had said he expected a decision on the next Fed chair shortly before or after the Davos summit.

Trump said he wanted a Fed chair like long-serving former Chair Alan Greenspan. He said he did not see strong economic growth as necessarily inflationary or requiring interest rate increases, and took issue with reactive markets.

“In the old days, when you had a good run, you’d announce good numbers and the stock market would go up. Now the stock market crashes every time because they think everyone’s going to raise rates,” he said.

Greenspan last week joined with other former top finance officials to condemn the Trump administration’s launch of a criminal probe against Powell.

Bessent and Trump have criticized Powell over his handling of monetary policy and interest rates. More recently, the Justice Department has issued a subpoena to Powell tied to the renovation of the Fed’s headquarters.

Powell said the threat of criminal charges was a consequence of the Fed setting interest rates based on its best assessment of what serves the public, rather than following the preferences of the president.

Trump nominated Powell for the position in 2017 and former President Joe Biden reappointed him.

Trump said Powell’s life “won’t be very happy” if he decides to finish out his term on the Fed, which runs through 2028, instead of resigning in May, when his term as chair ends. Powell has been tight-lipped on his plans.

“I think he wants to get out,” Trump said. “We’ll find out. If he stays, he stays.”

(Reporting by Steve Holland, Andrea Shalal and Jasper Ward ; writing by David Ljunggren; Editing by Katharine Jackson and Edmund Klamann)