Economist Sumerlin confirms he's in the running for Fed chair, backs big interest rate cut
Sumerlin, a former senior economist under then-President George W. Bush, said on CNBC that lowering the Fed's key rate would be an easy decision now.
The current yield structure combined with weakness in the labor market and stable inflation "tells us that we could easily do a 50 basis point cut ... without disrupting anything at all. So it seems like pretty much a no-brainer to me." A basis point equals 0.01%, so 50 basis points would be half a percentage point.
With the field looking wide open to succeed current Chair Jerome Powell, Sumerlin's position on rates puts him at least directionally in line with President Donald Trump. The president has repeatedly pushed the Fed to ease, advocating cuts of up to 3 percentage points, but the Powell-led Federal Open Market Committee has kept is benchmark funds rate unchanged since last lowering in December 2024.
As far as the nomination sweepstakes goes, Sumerlin, currently managing partner for Evenflow Macro, confirmed that he was contacted by the White House last week. He noted that he is close friends with Treasury Secretary Scott Bessent, who has taken a leading role in the search for the next chair, saying the two have been discussing monetary policy "weekly for probably 12 years."
"I got a call last Wednesday that said there was going to be a list [and] I was going to be on it. That's as much as I know right now," he said. "I'm waiting for more guidance on where we go from here."
Sumerlin indicated that he would be interested in the nomination so long as certain conditions are met.
"I think if it's the Fed chair, it's mission critical to the world. You have to be willing to do that," he said. "I've never met the president before. It would depend on us seeing eye to eye."
Sumerlin stressed the importance of Fed independence, something that has come under question has Trump has taken the historically unprecedented step of criticizing Powell and his fellow policymakers publicly and in stark terms. He's called Powell a "loser" and "stupid" and has criticized the FOMC for being complacent.
"You have to go into it knowing that every day you're going to walk in and just do the best job you can for the American people, and you're going to get criticism and be prepared to deal with that," Sumerlin said. "Ideally, you'd want to go in knowing that you're in synch. In synch goes both ways, and that would be part of the process trying to figure it out."
In addition to Sumerlin, other candidates include current governors Michelle Bowman and Christopher Waller, National Economic Council Director Kevin Hassett and former Governor Kevin Warsh, along with about half a dozen others.
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