Discussions about the successor to Jerome Powell, chairperson of the Federal Reserve (Fed), who has 11 months left in the term, have intensified, with global investment bank UBS noting that it is "not as fast as expected." According to the Donald Trump administration, UBS analyzed that it must consider not only Powell's "term as chairperson" but also his "term as director."
According to Shinyoung Securities on the 27th, UBS disclosed this in a report. Previously, The Wall Street Journal (WSJ) reported that the White House is already reviewing candidates to succeed Jerome Powell as chairperson. Considering that Powell's term lasts until May 2026, WSJ pointed out that it is still early.
UBS explained that it is not that early. This is because the White House may have in mind the position of Director Adriana Kugler, whose term ends on Jan. 31, 2026. In simple terms, the strategy is to appoint a candidate for chairperson as a director first and then elevate them to chairperson later.
UBS noted that, unlike Powell's chairperson term, the Fed board member term lasts until January 2028. Recently, by custom, it is highly likely that Powell will step down from both the chairperson and board member positions at the end of his chairperson term. However, he can retain his director position if he wishes.
There is a precedent. Marriner Eccles, who served as chairperson from 1934 to 1948, stepped down only from the chairperson position when President Harry S. Truman did not nominate him for reappointment, while he maintained his board member position until 1951.
Because the chairperson of the Fed must also hold a board member position, if Powell retains his director position while all seats are filled, the White House will only be able to choose from among the current directors for a chairperson candidate.
UBS stated that it is highly likely that the White House would prefer to first designate the next chairperson as a director for a smooth transition before promoting them to chairperson in line with Powell's chairperson term end.
UBS noted that the individuals mentioned by WSJ as potential candidates for the next Fed chairperson are not new. ▲ Kevin Warsh, former Fed director ▲ Kevin Hassett, chairperson of the Council of Economic Advisers (CEA) ▲ Scott Bessent, Secretary of the Treasury ▲ David Malpass, former president of the World Bank ▲ Christopher Waller, Fed director.
UBS remarked that "they all have substantial experience in economic policy, but their backgrounds are distinctly different," adding, "It is difficult to predict whom President Trump will choose, so we need to watch for further developments."