We were excited to hear that former President Donald Trump was considering a wide range of economists – many of them women and people of color – to take over the Federal Reserve Chair. This is a critical position for determining monetary policy in the United States. Kevin Hassett, current advisor and former Fed Governor, is one of those under consideration being reviewed. Also in the mix is Kevin Warsh, a Fed veteran who once sat on the central bank’s board. In case you missed it, just last week Trump criticized the current Fed Chair Jerome Powell in the same vein. He has retreated from his previous demands to have Powell replaced before the expiration of his term in May.
Until two weeks ago, Kevin Hassett looked like the leading outside candidate. His previous time as a Fed Governor makes him a highly educated pick for the post. Trump has a couple of good options under consideration to fill that slot—Hassett and Kevin Warsh. Warsh, a former Fed Governor himself, provides there the kind of deep instrumental experience that can be game-changing.
Hassett and Warsh are not the only big names on Trump’s list. It includes Marc Summerlin, economic advisor to the Bush Administration, and Lorie Logan, new President of the Dallas Federal Reserve. James Bullard, the former President of the St. Louis Fed, is under active consideration. This decision further highlights the gravity of the move for Trump as he seeks to appoint someone with deep experience in central banking.
It further carries Michelle Bowman, the Fed Vice Chair for Supervision, Chris Waller, a current Fed Governor, and Philip Jefferson, another sitting Vice Chair at the Federal Reserve. This impressive bunch of contenders underscores one reality behind Trump’s choice, whoever it is, to pick someone deeply rooted in economic theory and the art of governance.
Despite the array of options, Trump’s recent remarks indicate some hesitation regarding an immediate change at the helm of the Federal Reserve. Postponing the naming of a new chair might open the door to some turbulence in monetary policy. This is especially the case if no “shadow fed chair” steps in before Powell’s term is up. Creating such a gap would introduce unnecessary volatility into economic forecasting and policymaking operations at the Fed.
Rick Rieder, BlackRock’s senior managing director, has been mentioned as a possible nominee. David Zervos, the chief market strategist at Jefferies LLC, has similarly been invoked in this context. On September 28, 2023, Rieder made headlines for coming out at the Delivering Alpha conference in New York City. At the same time, Zervos was part of conversations on stage during the iConnections Global Alts 2024 event taking place in Miami Beach, Fla.