Speculation about the next Federal Reserve chair has reignited following recent remarks by U.S. President Donald Trump.

During a visit to Japan this week, Trump told business leaders that he was "considering" Treasury Secretary Steven Mnuchin for the role. He praised Mnuchin’s ability to "calm" financial markets, contrasting it with his own tendency to occasionally "disrupt" them.

Trump openly admired Mnuchin’s communication skills, stating, "How good is he on TV? He can calm markets—I can’t calm markets. I sometimes disrupt markets."

Despite Mnuchin publicly stating he has no interest in the position and is currently leading the search for candidates, his name continues to surface. Whether Trump’s seemingly offhand suggestion was a deliberate test or an unscripted comment, it has kept the guessing game alive.

Within the Trump administration, Mnuchin has long been seen as a moderating influence on the president—a stark contrast to Trump’s treatment of current Fed Chair Jerome Powell, whom he has called a "bonehead" and repeatedly threatened to fire. Such direct attacks have raised concerns about the central bank’s independence.

Trump’s emphasis on Mnuchin’s "calming" role suggests he may be looking for a successor who can both implement his desired policies and manage market sentiment effectively.

However, Trump quickly backtracked, adding that Mnuchin "wouldn’t take the job because he loves being at Treasury." He then seemingly dismissed the idea entirely, saying, "We’re not really considering him."

These contradictory statements come as Mnuchin himself oversees the search for Powell’s replacement, adding another layer of intrigue.

**Shortlist Narrows to Five as Decision Nears** The search for Powell’s successor has entered a critical phase, with his term set to end in May 2026. Mnuchin’s selection process has been ongoing for weeks, and the candidate list has reportedly been narrowed to five names: Fed Governors Christopher Waller and Michelle Bowman, Trump economic adviser Kevin Hassett, BlackRock strategist Rick Rieder, and former Fed Governor Kevin Warsh.

A final decision is widely expected between Thanksgiving in late November and Christmas in December.

**Early Influence? New Chair Could Shape Policy Before Taking Office** Trump is reportedly accelerating the selection process, aiming to finalize a candidate by year-end—a timeline far ahead of the norm. This could allow the White House to influence monetary policy earlier than usual.

Analysts suggest the new chair may fill the vacant seat left by departing Fed Governor Lisa Milan, enabling Trump to have the nominee participate in March and April rate-setting meetings before officially taking over in May.

**Policy Outlook Amid Rate Cut Demands** Whoever takes the helm will inherit a policy environment increasingly calling for rate cuts.

The Fed cut rates by 25 basis points in September amid signs of labor market weakness, and another similar reduction is expected this week, bringing the federal funds rate target to 3.75%-4%.

Notably, Trump, his allies, and even Mnuchin have advocated for lower rates. New Fed Governor Lisa Milan, a Trump ally, was the sole dissenter last month, pushing for a 50-basis-point cut and arguing rates should drop by 125 basis points by year-end.

Mnuchin himself suggested in August, before the Fed’s latest cut, that borrowing costs needed to fall by 150 basis points.