President Donald Trump is nearing a decision on who will replace current Federal Reserve Chair Jerome Powell. The choice has become one of the most closely watched economic decisions of his presidency because it will shape interest rates, inflation policy, and Wall Street confidence for years to come.
Powell’s term as chair ends in mid May. While there is still time to nominate and confirm a successor, the delay has fueled speculation that Trump is struggling to find a candidate who fully matches what he wants.
Trump originally selected Powell eight years ago believing he would support lower interest rates. That relationship deteriorated as Powell asserted the Fed’s independence and resisted political pressure on rate decisions.
Trump has repeatedly criticized Powell for keeping rates too high, arguing that inflation has been defeated and that aggressive cuts are needed to support growth, housing, and affordability. He has also accused the Fed of treating good economic news as bad news by delaying rate cuts.
Powell’s term expires in May, setting the stage for a replacement who could quickly shift the direction of monetary policy.
What Trump Says He Wants in a New Fed Chair
Trump has been explicit about his priorities. He wants a chair who will push for lower interest rates and do so convincingly enough that markets and other Fed officials will follow. At the same time, he wants loyalty and has openly worried that nominees promise alignment during interviews but assert independence once confirmed.
This has created a tension. The more politically aligned a candidate appears, the more markets may worry about Fed independence. The more independent and credible a candidate appears, the less certain Trump can be that rates will fall as fast as he wants.
Treasury Secretary Scott Bessent has narrowed the list to four candidates, each with strengths and weaknesses.
Kevin Hassett
Kevin Hassett is the director of the White House National Economic Council and a long time Trump economic adviser. He is closely aligned with Trump’s agenda and has defended the administration’s economic policies on television and in public appearances.
His loyalty is his greatest strength and his biggest weakness. Analysts have raised concerns about whether he could maintain credibility with other Fed officials and markets. Trump has also suggested he prefers to keep Hassett in his current role, where he serves as a strong public surrogate.
Kevin Warsh
Kevin Warsh is a former Federal Reserve governor with strong establishment credentials. He looks and sounds like a traditional Fed chair and has experience navigating financial crises.
However, Warsh was known as an inflation hawk during his time at the Fed and is closely associated with traditional Republican economic orthodoxy. Some economists question whether he truly fits the current direction of the party or Trump’s push for faster rate cuts.
Christopher Waller
Christopher Waller is a current Fed governor appointed by Trump in 2020. He is popular on Wall Street because he has made consistent, data driven arguments for lowering rates while emphasizing the labor market.
His drawback is political distance. He has no personal relationship with Trump, and a brief interview reportedly failed to build strong chemistry. Trump has also pressed Waller on past rate decisions that he believes were politically motivated.
Rick Rieder
Rick Rieder is the chief investment officer of global fixed income at BlackRock, overseeing trillions of dollars in assets. He has consistently argued that interest rates are too high and that productivity gains from technology are changing the inflation outlook.
Rieder has focused heavily on housing affordability, labor mobility, and the real world impact of high borrowing costs. His long standing views on lower rates appear rooted in market analysis rather than political ambition, which could reassure investors.
The concern is politics. Rieder has no close ties to Trump and comes from a firm that has drawn skepticism from Trump’s base. His past political donations have gone to candidates outside Trump’s orbit.
Who Is Emerging as the Leading Candidate?
Rieder has emerged as the leading contender. Prediction markets show him with the highest odds, well ahead of the other finalists. Trump has publicly described him as very impressive, and analysts increasingly view him as a compromise choice.
Rieder is seen as a candidate who wants lower rates but is not widely viewed as a threat to the Fed’s independence. That balance may make him acceptable both to Trump and to markets.
Wall Street reaction is central to this decision. Markets tend to reward credibility and predictability at the Fed. A nominee seen as overly political could spook bond markets and raise borrowing costs, undercutting the very goal of lower rates.
Waller and Rieder are generally viewed as the most market friendly choices. Hassett raises the greatest independence concerns, while Warsh’s hawkish past creates uncertainty about how aggressively he would actually cut rates.
Economists and investors are divided. Some argue Trump is seeking something unrealistic, a chair who is both fully loyal and fully independent. Others believe Rieder represents a rare middle ground, someone who understands markets deeply while supporting a shift toward lower rates.
Administration officials insist no decision has been made and warn against speculation. Still, with Powell’s term ending in May, attention is intensifying.
Whoever is chosen will not just replace Jerome Powell. They will define how much influence a president can exert over the central bank and how the Federal Reserve responds to a changing economy in the years ahead.
