By Steve Holland and Bo Erickson
WASHINGTON, Jan 29 (Reuters) - President Donald Trump said on Thursday he intends to announce his pick to replace Federal Reserve Chair Jerome Powell on Friday, as speculation intensifies over who will lead the U.S. central bank after Powell steps aside from the job in May.
"I'll be announcing the Fed chair tomorrow morning," Trump said at the Kennedy Center on Thursday.
Earlier in the day, at his first cabinet meeting of 2026, Trump said he would announce his choice to succeed Powell next week, while reiterating his call for the Fed to cut interest rates deeply.
Powell's term as Fed leader ends in May but recent pressure by the Trump administration - including a Department of Justice probe of cost overruns for renovations at the Fed's headquarters in Washington - has given rise to the possibility that Powell might remain at the Fed until his separate term as a Board of Governors member expires in 2028.
The Fed, which cut rates three times in 2025, left its benchmark interest rate unchanged in the 3.50%-3.75% range after the end of a two-day policy meeting on Wednesday. Trump says the rate should be two to three percentage points lower, a level historically consistent with a stalled or faltering economy.
The economy grew at a 4.4% annualized rate in the third quarter, according to Commerce Department data.
Over the course of the Trump administration's months-long formal search for Powell's successor, the president has been seen to favor different candidates, even as he has ramped up his campaign to exert influence over the Fed, whose independence from political pressure is seen as key to its ability to control inflation.
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In recent months Trump has tried to fire a Fed governor in a case now before the Supreme Court, and his Justice Department has opened a criminal investigation into Powell for statements he made about building renovations - a move the Fed chief has called out as a "pretext" to pressure him over monetary policy.
FOUR CANDIDATES ON TRUMP'S SHORT LIST
Now down to a four-person short list, the candidates to take the reins from Powell all agree with Trump that rates should be lower - indeed, that was one of the president's explicit criteria for his pick.
Rick Rieder, chief investment officer of BlackRock's global fixed income business, recently became the odds-on favorite to be Trump's nominee. Rieder, who has never worked in government or at the Fed, would bring a fresh face to an institution that the president accuses of entrenched political bias.
Former Fed Governor Kevin Warsh is also seen as a contender for the job; he has called for regime change at the central bank and wants, among other things, a smaller Fed balance sheet, a goal seemingly at odds with Trump's preference for looser monetary policy. Trump almost picked Warsh in 2018 for the top Fed job, but chose Powell instead, a decision the president has publicly and loudly regretted for much of the time since then.
Fed Governor Christopher Waller, one of two policymakers who dissented this week in the central bank's decision to keep rates unchanged, is also in the running. He was the first Fed policymaker to make the economic case for lower rates, saying that tariffs wouldn't cause inflation and the economy needed the support, both arguments that have won over many of his colleagues and helped seal support for the rate cuts last year.
White House economic adviser Kevin Hassett was an early front-runner for the job but is now seen as an unlikely choice after Trump said he would rather keep him in his current post. Hassett is an economist and unapologetic cheerleader for many of the president's orthodox-defying policies, including high tariffs and an immigration crackdown.
(Reporting by Jarrett Renshaw and Ann Saphir; Editing by Franklin Paul and Paul Simao)
