Trump wants aggressive rate cuts as Scott pushes structural changes

Donald Trump’s Treasury Secretary, Scott Bessent, has just finished weeks of interviews with 11 candidates for the top job at the Fed, all of them questioned about their stance on interest rates, asset unwinding, and the central bank’s future.

The interviews wrapped up Tuesday, with Scott joined by Hunter McMaster from the Treasury and adviser Francis Browne. Each session lasted nearly two hours, and the questioning followed a clear script, one rooted in Scott’s recent 6,000-word takedown of the Fed’s policies in International Economy.

Everyone interviewed was asked how they’d tackle what Scott calls “mission creep,” the central bank doing too much, and how they would fix the mess caused by quantitative easing, or QE.

In his article, Scott labeled QE a “gain-of-function monetary policy experiment”, blaming it for inflating the balance sheet and giving too much control to unelected technocrats. He made it clear he wants less Fed power over bond markets and more authority handed back to the Treasury.

Trump wants aggressive rate cuts as Scott pushes structural changes

Trump has made no secret that he wants the Fed’s benchmark rate cut to 1%, far below the current 4% to 4.25% range. He’s not interested in debating QE or mission creep, he wants someone who will cut borrowing costs hard and fast.

He has final say on the appointment and is eyeing three men: Kevin Warsh, a former Fed governor; Christopher Waller, who’s on the board now; and Kevin Hassett, one of his top economic advisers.

Rick Rieder, the chief investment officer at BlackRock, is also in the running. A person close to the discussions allegedly told Financial Times that Rick “performed very well,” though he’s seen as less likely to land the job than Trump’s inner circle.

Scott himself hasn’t dropped many hints, but told Fox Business that he’s looking for someone “with an open mind” who’s “looking forward.” He admitted some candidates surprised him, making it hard to shrink the list down to a final recommendation for the White House.

Jay Powell will step down as chair in May 2026, ending an eight-year run. He could stay on as a regular Fed governor until January 2028, but Trump has already moved to sideline him. He’s called Powell a “moron” who was “too late” to act on inflation and has tried more than once to fire him.

Internal Fed backlash grows as Trump’s allies target Lisa Cook

While Scott is pushing balance sheet reform, senior Fed officials aren’t backing down. They say QE may have driven up asset prices that benefited the rich, but without it, unemployment would’ve exploded, hitting the poorest Americans first.

That argument hasn’t stopped Trump’s team from hammering the Fed from all directions.

Russ Vought, who runs the Office of Management and Budget, slammed what he called the “ostentatious” $2.5 billion renovation of the Fed’s headquarters. At the same time, Bill Pulte, another Trump ally, accused Lisa Cook, the first Black female Fed governor, of mortgage fraud.

Trump used the accusation to try to fire her. Cook has denied it and is suing him. The Supreme Court ruled last week that she can keep working at the Fed until at least January 2026.

Trump’s current goals and Scott’s views aren’t exactly in sync. Trump wants quick, deep rate cuts before 2026. Scott wants to gut QE, shrink the balance sheet, and clip the Fed’s powers. But both agree Powell has to go, and soon.

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