U.S. Treasury Secretary Scott Bessent said on Tuesday he was concluding a second round of interviews later in the day for a new U.S. Federal Reserve leader, and there was a good chance President Donald Trump would announce his pick before Christmas.

White House economic adviser Kevin Hassett is seen by allies and advisers of Trump as the frontrunner, Bloomberg reported, citing unnamed people familiar with the matter. Hassett, like Trump, has said interest rates should be lower than they are now under the leadership of Fed Chair Jerome Powell.

Bessent has narrowed the search for a successor to Powell, whose leadership term expires in May, to Hassett and four others from as many as 11, and said in an interview with CNBC the latest interviews have focused on how the candidates would guide what has become a "very complicated operation."

"We're going to have the last interview in the second round today ... We got five very strong candidates," Bessent said.

"I think that there's a very good chance that the president will make an announcement before Christmas," Bessent said. "But it's his prerogative, whether it's ... before the Christmas holidays, and the New Year's. But things are moving along very well."

WHITE HOUSE CALLS REPORT SPECULATION

The selection of Powell's successor offers Trump an opportunity to install someone more like-minded about wanting lower interest rates than Powell has proven to be. Trump, who elevated Powell to lead the Fed during his first term, persistently lashes out at the Fed chief for not cutting rates sharply.

The White House dismissed Bloomberg's report on Hassett, who also served as an economic adviser to Trump during the president's first term.

"Until an announcement is made by President Trump, discussion about Fed nominations is speculation," White House spokesman Kush Desai said.

The other remaining candidates include former Fed Governor Kevin Warsh; current Governors Christopher Waller and Michelle Bowman, who is also the vice chair for supervision; and Rick Rieder, BlackRock's chief investment officer for global fixed income.

Earlier on Tuesday, online betting markets Kalshi and Polymarket reflected a neck-and-neck race between Hassett and Waller, whose prospects were seen improving sharply this week after Waller said he had a good second interview with Bessent.

"I talked to Scott about 10 days ago. We had a nice, a great, meeting," Waller said on Monday on the Fox Business "Mornings with Maria" show. "I think they are looking for someone who has merit, experience, and knows what they are doing in the job, and I think I fit that."

Following the Bloomberg report, however, bets favoring Hassett surged on both platforms, with each assigning around a 50% likelihood in early afternoon trading of Hassett getting tapped for the job.

The Fed has cut interest rates by a quarter-percentage point at its last two meetings, and rate futures markets are positioned for a third cut at its next meeting in December. Its benchmark rate is now set in a range of 3.75% to 4.00%.

Source: Investing.com