Bessent, Warsh, Hassett are the leading contenders to get Fed chair job, CNBC survey finds
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It's a virtual three-way tie to replace Fed Chair Jerome Powell as Fed chair when his term expires.
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July 29, 2025
12:55 PM
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It's worth noting that Watch now3:4303:43CNBC Fed Survey: Respondents see a three-way tie in race to replace Fed Chair PowellSquawk BoxIt's a virtual three-way tie to replace Fed Chair Jerome Powell as Fed chair when his term expires
The CNBC Fed Survey found 24% of respondents saying President Donald Trump will replace Powell with Treasury Secretary Scott Bessent and 24% saying it will be former Fed Governor Kevin Warsh
Close behind is Kevin Hassett, director of the president's National Economic Council with 22%
Moreover, At the same time, More distant is current Fed Governor Chris Waller at 14%
Additionally, Trump repeatedly has called for Powell's resignation, saying he's been late to cut interest rates, and has considered firing him
He's also accused the Fed chair of mismanaging a $2. 5 billion renovation of its headquarters and a separate building, a charge Powell has denied and for which the president has vided no evidence beyond the cost overruns
However, Zoom In IconArrows pointing outwardsCNBCAfter a recent visit to the construction site, the president appeared to ease off on his criticism of the ject and the Fed's monetary policy and suggested he would not fire Powell, in today's financial world
In contrast, Powell's term as chair concludes in May 2026 though he can stay on as governor if he wishes until 2028 (which is quite significant), in today's financial world
In the survey, 84% said the president would not fire Powell before his term ends in May
The 37 respondents include fund managers, economists and strategists
Conversely, "With the jockeying going on to become the next Fed chair already appearing inside the Fed, it is the Fed's independence has already been commised," economist Joel Naroff wrote. "This has elevated long rates and weakened the dollar
There's little to believe that would change, especially given the expectation that the next Fed chair will be a Trump loyalist (something worth watching)
Moreover, "Zoom In IconArrows pointing outwardsCNBCOverall, respondents gave Powell a grade of B -, up from C+ when CNBC last asked the question in 2023
On the other hand, He received solid B's on leadership, transparency, market knowledge and communication, but a C- on economic forecasting (up from a D in 2023)
Conversely, Respondents graded Powell with a B- on economic and regulatory expertise
Additionally, Former Fed Chair Ben Bernanke left office with a final grade of B and Janet Yellen's final grade was a B+ (this bears monitoring), in light of current trends
Policy outlookThe president's pressure on the Fed to cut rate is believed by some respondents to be having the opposite effect
While 56% say it's having no impact on policy, 42% believe it makes rate cuts less ly
Moreover, Just 3% say it makes cuts more ly, in today's financial world
No respondent forecasts a rate cut at this meeting, although 27% believe the Fed should cut (fascinating analysis)
On the other hand, There could be two dissents at the meeting as two Trump-appointed governors have said they supported lower rates in July
However, But survey respondents see those cuts coming, with 65% expected one in September and another one ly before year end
That would bring the funds rate down to 3
Further cuts are forecast for 2026, with the average respondent putting the funds rate at 3 (an important development). 5%, though that will remain above the average neutral rate of 3
US President Donald Trump speaks with Federal Reserve chair Jerome Powell (R) as he visits the Federal Reserve in Washington, DC, on July 24, 2025
TAndrew Caballero-Reynolds | Afp | Getty ImagesTariff uncertainty remains the No. 1 threat to the expansion, ed by overall uncertainty the president's policy and continued high inflation
But overall, some of the uncertainty sparked by administration's policies have eased
Moreover, Uncertainty around the economic impact of tariffs fell to 62% from 71% in June (this bears monitoring), in today's market environment
And 65% expect a trade deal with China, up from 54%
A 51% majority now believes tariffs will result in only one-time price increases, rather than broader inflation, an 8-point gain from June
On the other hand, "Trumpian uncertainties on the economy and policies are settling down," wrote Allen Sinai, chief global economist/strategist at Decision Economics. "That's clarifying and very positive for equities, considering recent developments
But there are still big, big societal, political, geopolitical, and non-economic uncertainties. "Along with less uncertainty has come a modest boost in the economic outlook
This analysis suggests that bability of a recession in the next year has fallen to 31% from 38% in June and 53% in May after the president announced sharply higher "recical" tariffs
However, GDP is forecast to rise 1. 4%, up from 1 (remarkable data). 1% in June, though still below the more optimistic 2. 4% in January
The outlook remains for a recovery next year with an average 2. 2% GDP forecast in 2026
Troubles in the labor marketUnemployment is seen rising only slightly from the current rate of 4
On the other hand, Furthermore, 4% this year and remaining stable at that level in 2026
But there are widespread concerns the labor market slowing
Furthermore, Conversely, "Employment is not as good as some believe," said Drew T
Matus, chief market strategist, MetLife Investment Management. "This, combined with housing issues and volatility, is ly to mpt a significant slowing in activity as we apach year-end, amid market uncertainty. "For most respondents, employment looks to be the key to whether Fed is in the right place
Nevertheless, "The labor market is slowing, and the housing market is deflating
Ultimately this will force the Fed to cut interest rates," said Troy Ludtka, senior US economist at SMBC Nikko Securities Americas
However, But Jack Kleinhenz, chief economist, National Retail Federation, wrote, "A relatively balanced labor market, the recent rise in the [personal consumption expenditures price index], and the potential for tariffs to push up inflation in the coming months justifies the cautious pace by the Federal Reserve
However, Even though uncertainty continues, the economy is expected to grow. "Despite better growth and less uncertainty, respondents are cautious the stock market this year
The average respondent puts the year-end S&P 500 level at 6,344, below the close on Monday
It's forecast to rise to 6,936 next year, a 9% increase
On the other hand, But there's also greater concern overvaluation, as 84% see stocks as somewhat or extremely overvalued, up from 58% in June, and the highest in a year.
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