DOJ investigation clouds future of Fed chair nomination

The future of the Federal Reserve‘s leadership is in limbo due to an investigation into current Fed Chair Jerome Powell that has prompted bipartisan backlash.

Following the news about a Department of Justice (DOJ) probe into Powell, Sens. Thom Tillis (R-N.C.) and Elizabeth Warren of (D-Mass.) accused Trump of using the DOJ to pressure Powell to depart so the president can gain political control of the central bank.

Tillis, Warren and Rep. Maxine Waters (D-Calif.) also called on the Senate to halt action on Trump nominees to the central bank during the investigation. Tillis said he would oppose any picks until the investigation was resolved.

Powell’s term as chair expires in May, but he is not required to leave. His term on the Fed board of governors expires in 2028, so he could remain as a policymaker until then.

Several potential replacements have been publicly identified to serve as the next chair, but it’s expected that the nominee will first be appointed as a Fed governor before being nominated as chair.

The nominee is set to begin a 14-year term as governor on Feb. 1, succeeding Stephen Miran, who has served since Adriana Kugler’s resignation in August 2025. Kugler’s term was due to end in January 2026.

CNBC previously reported that the five Fed chair candidates are Michelle “Miki” Bowman, the Fed’s vice chair for supervision; Fed Governor Christopher Waller; Kevin Hassett, director of the White House National Economic Council; former Fed Governor Kevin Warsh; and BlackRock executive Rick Rieder.

Last week, Treasury Secretary Scott Bessent, who is leading the search process and has removed himself from consideration for the role, said during an appearance on Fox Business that Trump has one more interview to do, which is with Rieder.

Bessent, who has been conducting interviews since the summer of 2025, told CNBC’s Sara Eisen in October that he would give Trump “three or four candidates for him to interview” shortly after Thanksgiving.

Sources close to the president told Bloomberg in November that Hassett is the leading candidate to be the next chair. In December, Trump told Reuters that he was “leaning toward” both Hassett and Warsh for the role. Earlier this week, he echoed that sentiment, telling Reuters that the “two Kevins are very good. … You have some other good people too, but I’ll be announcing something over the next couple of weeks.”

On Friday, however, The Wall Street Journal reported that Trump seemed to dismiss Hassett’s chances while praising a recent TV appearance by him. “I actually want to keep you where you are,” Trump said.

Hassett came under fire earlier this week after he defended the DOJ’s investigation of Powell as routine oversight during a conversation with reporters. The Journal reported that economists openly criticized Hassett’s remarks as “inappropriate” for a potential central bank leader.