Administration closer to naming new Fed chair

Jerome Powell's term as Federal Reserve Chairman doesn't expire until May 15, 2026, but his successor may be named before Christmas.

What that will mean is awkwardness and uncertainty for Powell and his successor. But speculation is already soaring on the next Fed chair , however, and that may affect how the economy and markets react.

Treasury Secretary Scott Bessent, charged with nominating Powell's successor, has said he will recommend his choice to the president before Christmas. The job is still subject to Senate confirmation.

Trump has repeatedly criticized Powell, angry that the Fed has not cut interest rates in a softening economy. But the Fed has basically been an independent agency since after World War II with its decisions not subject to Presidential or Congressional approval.

The president threatened to fire Powell this past winter, but such a move was stalled because the Chairman and Fed governors probably can't be fired except for cause. It's a dispute now in the courts.

Powell has said he won't leave before his term ends. Though he could serve as a Fed governor until 2028, he is likely to resign after his successor is confirmed.

Whoever takes the job will do so knowing Trump wants to be able to dictate Fed policy as the White House works to centralize government policy.

The nominees for the job are:

• Kevin Hassett, chairman of the National Economic Council and a long-time advisor to President Donald Trump.

• Christopher Waller, now a Fed governor.

• Michelle Bowman, the Fed's vice chair and a firm advocate for reducing banking regulation.

• Kevin Warsh, a former Fed governor and Wall Street banker.

• Rick Rieder, global chief of fixed-income at money-management giant BlackRock.

Bloomberg and others have said Hassett is the front runner. He is an ebullient economic advisor who has long called for interest-rate and tax cuts. Hassett has been an advisor to Republican political candidates. He was worked on Sen. John McCain's 2008 campaign against Barack Obama.

Hassett may be best known as the co-author of Dow 36,000. The book, published in 1999, argued that stock prices were too low and could move much higher. The book came out just as the stock market peaked and broke during the Dot.com bubble.

The Dow Jones Industrial Average didn't top 36,000 until November 2021, during Joe Biden's term. The Dow closed at 47,716.42 on Friday.

Naming Hassett would probably boost stock and bond prices. It's also possible the financial markets are already pricing in a Hassett Fed nomination.

But stock index futures were lower Sunday evening after the big week enjoyed by stocks last week. The Standard & Poor's 500 Index was up 3.7% for the week, with the Dow up 3.2% and the Nasdaq Composite Index rising 4.9%.

The reports to watch for

Ordinarily, the Labor Department would release its November jobs report on Friday. The report would command the most attention during the week. But the release has been pushed back to Dec. 16 because of the government shutdown and problems getting the data collected.

But there are other reports to watch this week before the Fed's interest-rate decision on Dec. 10.

Purchasing managers reports — manufacturing

The state of U.S. manufacturing will be examined in Purchasing Manager Index reports from Standard & Poor's and the Institute for Supply Management. These measure manufacturing based on contracts signed. A weak report can set off a market sell-off.

S&P's last report put the index at 51.9. Above 50 means manufacturing was growing. The ISM's report showed manufacturing weakening slightly. That's what economists expect from the reports.

Purchasing managers reports — services

S&P and ISM will report on the services economy on Wednesday. Expect decent numbers because the service economy is in better shape — and bigger — than the manufacturing sector.

ADP employment report

This report, issued by payroll processing giant ADP, is the closest we will get to a November jobs report. Due Wednesday morning, the report will look only at private-sector employment, however.

For October, ADP reported a job gain of about 42,000, the first gain in three months. Pay growth was flat, suggesting "shifts in supply and demand are balanced."

Aside from the pandemic, U.S. private sector job growth has grown fairly steadily since September 2010. The growth rate has flattened in 2025.

Jobless claims

States report jobless claims data to the U.S. Labor Department, which puts out a weekly aggregate report every Thursday. Last week, the estimate was 216,000 new claims for unemployment insurance, down 6,000 in a week.

The report seems to confirm economist estimates that jobless rates may be rising. But they are still relatively low.

Layoff report

Outplacement firm Challenger Gray Christmas tracks layoff announcements monthly. Last month, the company said it saw layoffs affecting 153,074 workers in October, up 183% from September.

Directionally, the report is right. The numbers may not be perfect. The industries announcing the biggest layoffs were technology, retail, services and warehousing.

The November report is due at 7:30 a.m. Thursday.

Fed's favorite inflation report

Friday morning, the Commerce Department reports its Personal Income Spending Index in a gaggle of releases about incomes. The Index is the Federal's preferred inflation report because it tracks prices on stuff people actually buy.

The report will be for September because of the government shutdown.

Like the PMI reports, this report can move markets. It may influence the thinking of Fed officials because it comes out before the Dec. 9-10 Fed meeting.

How consumers are reacting to the economy and jobs

The University of Michigan's Consumer Sentiment Index offers a first look at how consumers are thinking in a report set to be released at 10 a.m. ET Friday morning. This is an attitudinal survey, and attitudes often don't match with spending decisions and other activities.

Nonetheless, people and investors pay attention to this report and the Conference Board's Consumer Confidence Index.

This story was originally published by TheStreet on Dec 1, 2025, where it first appeared in the Fed section. Add TheStreet as a Preferred Source by clicking here.