With the May deadline for Federal Reserve Chairman Jerome Powell’s term approaching, former President Donald Trump is intensifying his push. He has begun naming possible frontrunners for this coveted post. Kevin Hassett, Kevin Warsh, and Rick Rieder are finalists too. Though they have received scant media attention during the nomination process, they have all gained Trump’s favor due to their deep economic credentials and ties to conservative orthodoxy.
Kevin Hassett, another long-time conservative economist, was the go-to economic adviser to the president for much of Trump’s presidency. Even the former president has heaped on the praise. Trump, in introducing Hassett, said he was “great” and looking to his success in prior economic advisory roles. Perhaps that’s not surprising from Hassett, who led the White House Council of Economic Advisers during Trump’s first term. Today, he heads up the National Economic Council. His family ties give him a powerful boost. His father-in-law, Ronald Lauder, is a billionaire businessman who’s been one of Trump’s early and long-time supporters.
Trump’s endorsement of Christopher Waller, now a Federal Reserve governor himself, seems to underscore the diversity of candidates being considered. At 66 years old, Waller can still be characterized as an old hand when it comes to economic policy. He doesn’t have personal connections that could boost Hassett or Warsh in the President’s estimation. In dispatches back during the campaign, Trump called Waller “great,” and pointed to his deep breadth of experience on the field.
Rick Rieder, the BlackRock Inc. chief investment officer, has become a leading candidate. He will be joined by Hassett and Waller in the GOP primary. Rieder’s fingerprints are on a staggering $2.4 trillion in assets. He had a celebrated pedigree on Wall Street, which included a stint at Lehman Brothers and as founder of his own hedge fund before joining BlackRock. Trump has described Rieder as “very impressive,” highlighting his sympathetic stance towards lower interest rates, which aligns with Trump’s economic preferences.
As Trump prepares to make his decision in the coming weeks, he has acknowledged the importance of the Federal Reserve’s independence. To concerns that he would not be independent enough, Hassett said, “The Fed’s independence was extremely, hyper important.” The third comment, from a states ftw reader, shows an excellent awareness of the balance of power between partisan politics and technocratic economic policymaking.
Interest rates, particularly in the context of inflation and recession, are all the rage in today’s economic commentary. With Trump’s private preference for candidates who support lowering rates Trump’s final selection could make a world of difference. He has openly expressed his views, stating, “He thinks you have to lower interest rates.” This feeling reflects the saving grace of Rieder’s demand-driven monetary policy.
As tectonic plates continue to take the shape of the new landscape, the speculation begins with every Powell successor. Together, Trump’s picks signal what his economic priorities will be and what U.S. monetary policy might look like in the years to come. The appropriations decisions made in the next few weeks will have a profound effect on financial markets. Beyond their environmental impacts, they will affect the overall US economy in profound ways.