"He's somebody that gets it. I hope everything goes well," Mr. Trump added. "Herman Cain is a very good guy."
The selection of Cain had been rumored for months, as the former GOP candidate for President in 2012 had met at the White House with the President earlier this year.
Already facing questions about his selection of conservative economist Stephen Moore to the Fed, the President's choice of Cain could also generate controversy in the U.S. Senate.
In the hallways of the Capitol, it was obvious on Thursday that the idea of Cain on the Federal Reserve landed with a bit of thud for some Senators.
Neither Cain nor Moore has been officially nominated by the President as yet. Confirmation hearings would be required before the Senate Banking Committee.
While he no longer hosts a regular talk radio program, Cain has remained active in GOP politics, recently creating a political action committee to work on behalf of President Trump.
"If you turn on the television or open your Facebook or Twitter feed you are accosted with a stream of disrespectful, dishonest and destructive news about the 45th President of the United States," says the website of American Fighting Back PAC.
"America Fighting Back (AFB) is chaired and spearheaded by Herman Cain one the most masterful communicators of our time," the site states.
"The main purpose is carry out a National Messaging & Public Relations Campaign to facilitate and grow a national grassroots movement of educated and informed voters to engage and fight for the President’s policies and freedom agenda to win in 2020," it adds.
Cain's business career has been highlighted by his work as CEO of Godfather's Pizza.
Cain also spent two years as head of the Federal Reserve bank of Kansas City.