U.S. President Donald Trump has effectively wrapped up the search for the next Federal Reserve (Fed) chair.
Bloomberg said on the 23rd (local time) that President Trump has completed all interviews for candidates to be the next Fed chair and is nearing a final decision. Meeting with reporters that day, Trump said, "I won't say who, but I have in mind a very fine and respected person," adding, "I will announce it soon." The term of current Chair Jerome Powell ends in May.
The final shortlist has been narrowed to four. They are former Fed Governor Kevin Warsh, National Economic Council (NEC) Chairperson Kevin Hassett, current Fed Governor Christopher Waller, and BlackRock global fixed income chief investment officer (CIO) Rick Rieder. Warsh was initially considered the strongest contender, but momentum has shifted sharply in recent days.
According to the U.S. online prediction market Polymarket, Rieder's nomination odds, just 3% 10 days ago, surged to 30% on the 23rd. The odds for early front-runner Chairperson Hassett plunged to 6%. Axios analyzed that "what proved decisive was Trump calling Rieder 'very impressive' in a CNBC interview last week."
Rick Scott Bessent, the Treasury secretary, led the process, and Rieder has consistently been floated as a "hidden card." Citing a White House official, CNN said, "Rieder met with President Trump at the White House last week," adding, "Vice President J.D. Vance and Chief of Staff Susie Wiles attended the meeting." Rieder was said to have left a very positive impression on those present.
Rieder's biggest distinguishing feature is that he is not from the bureaucracy. Unlike the other candidates, he has no experience working within the Fed system or in Washington politics. CNN said this "outsider" résumé is actually working as a positive factor inside the White House. The mood is that he is seen as an external fit to drive the Fed reforms Trump wants.
Rieder's usual views on monetary policy are also similar to Trump's. Trump has openly complained that Powell has been reluctant to cut interest rates. In a recent media interview, Rieder likewise said, "To address concerns about the labor market and help small businesses, the benchmark rate should be lowered to around 3%, below the current level." That aligns exactly with the low-rate stance pursued by the Trump administration.
In an interview while attending the Davos Forum recently, Trump also hinted the selection was imminent, saying, "The candidates have been narrowed to three, no, two, and in my mind probably one." In financial markets, there is talk that the nominee could be announced as early as the end of this month. Rather than waiting for Powell's term to expire (May), the strategy appears to be to reveal the successor early to send a message to the markets and the Fed.
Tensions between the Trump administration and the current Fed have already reached a peak. Recently, the administration signaled even the possibility of a criminal probe over the Fed headquarters remodeling project, ratcheting up pressure. Powell dismissed this as "retaliation for not cutting rates quickly." Because of this, some expect that no matter who becomes the next chair, efforts by the second Trump administration to bring the Fed to heel will intensify.