Former Fed President Expresses Willingness to Take Over as Fed Chair and Supports Starting a Cycle of Rate Cuts in September
James Bullard, an American economist and former St. Louis Fed President, has spoken with Treasury Secretary Scott Bessent about the Fed Chair position and expressed his willingness to take the reins if the conditions are right.
This development comes as the Trump administration seeks to replace current Fed Chair Jerome Powell, whose term ends in May 2026.
Bullard advocates for the Fed to begin cutting interest rates in September and to reduce them by 100 basis points over the next year, bringing them closer to neutral. He also emphasized that tariffs are not inflationary, but acknowledged that they could weigh on economic growth.
Notably, Bullard stated that he would not be dogmatic about monetary policy and noted that he had supported significant rate hikes during the period of high inflation in 2022-2023.
Notably, Treasury Secretary Bessant previously revealed that the list of candidates for the Federal Reserve Chair includes 11 names, including current Fed Governors Bowman and Waller, Dallas Fed President Logan, and National Economic Council Director Hassett. Interviews are expected to officially begin after Labor Day in September.
The White House's push for a new Fed Chair is primarily motivated by the urgent need for an interest rate cut. President Trump has repeatedly criticized Powell for raising interest rates "too late" and demanded a sharp reduction in the benchmark rate from the current range of 4.25% to 4.50% to 1%.
Treasury Secretary Bessant emphasized that accommodative policy is crucial to boosting the sluggish US real estate market. Low interest rates can stimulate housing construction, thereby curbing house price increases in the medium term.
The market generally expects the Federal Reserve to approve a 25 basis point rate cut at its September meeting. However, a recent report from Deutsche Bank refuted Bessant's view of a 150-175 basis point rate cut, arguing that monetary policy rules currently only support a modest 25 basis point adjustment.