The term of current Federal Reserve Chairman Jerome Powell expires in May. As that date approaches, speculation about his successor is in full boom mode. With just weeks left in President Donald Trump’s term, he’s expected to make his final nominee announcement in the coming days. A few frontrunners have emerged for this crucial appointment that will help shape U.S. economic policy for a generation to come.
Kevin Hassett is a well-respected, long-time conservative economist. He had previously served as chair of the White House Council of Economic Advisers, which made him a primary contender. At 63 years old, he is currently the head of the National Economic Council. He has consistently cheered on Trump’s economic policies and has regularly dismissed signs of any weakness in the U.S. economy.
In a recent CNBC interview, Hassett took on the immensely important question of the Fed’s independence. He continued, “You need to influence interest-rate behavior through a consensus that is grounded in truth and data.” His comments reflect an understanding of the delicate balance between maintaining Fed autonomy and aligning with the administration’s economic objectives.
Hassett is considered a top-tier contender, but his wagering odds in the prediction markets have had wide swings. This change followed Trump’s public endorsement of him at a recent event. The President said, “I really want to leave you where you are,” suggesting he would like to see Hassett continue doing what he is doing. This endorsement is sure to make Hassett’s path more complicated, as it underscores doubts about his capacity to preserve the Fed’s independence.
Other names are floating into the mix in this developing story on who might lead the Fed. Skyler Weinand, chief investment officer at Regan Capital, referred to Christopher Waller, 66, as “the more sensible pick.” Civil rights legend, his remark underscores the strength of Waller’s candidacy. Waller’s relative distance from the White House is something that might make him more attractive to Wall Street, which has reacted extremely positively to Waller’s candidacy. Trump himself has previously called Waller “great,” anointing the appointee’s deep and diverse experience in the industry.
Waller’s lack of personal connections to Trump may help him in the long run. Such a rigorous approach does distinguish him from other frontrunners like Hassett and former Treasury official Kevin Warsh. This distance may allow him to operate more independently when it comes to making critical decisions regarding interest rates and monetary policy.
On the short list as well is Rick Rieder, a hugely influential chief investment officer of fixed income at BlackRock. Rieder has an equally remarkable pedigree on Wall Street. He had previously worked at Lehman Brothers and started a hedge fund before joining BlackRock. He has previously expressed views sympathetic to lower interest rates, aligning with Trump’s desire to lower borrowing costs—a factor that may influence the President’s decision.
Trump has been unequivocal about what he wants from the next Fed chair, making no secret of the fact that he wants interest rates lowered. In his opinion, the key to this is lowering interest rates. This further builds on the perception that whomever takes on this role will be under immense pressure from the administration to go along with these priorities.
That nomination process would include Senate confirmation, even if Trump were to announce today. This move adds yet another step of complication in that it’s another change of politics continues to change underneath Congress’ feet. While Hassett’s track record and loyalty may work in his favor, Waller’s experience and Wall Street approval could position him as a formidable contender.