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Trump poised to name Powell's successor in coming weeks
U.S. President Donald Trump is set to announce his pick to replace Jerome Powell as Federal Reserve chair before Powell's term expires in May, as the central bank faces mounting political and internal pressures over interest rate policy.
High-stakes moment for the Fed
The next chair will inherit a contentious environment. The Fed is grappling with divisions among policymakers over rate cuts while navigating unprecedented public criticism from Trump, who has repeatedly pushed for lower borrowing costs. Analysts warn that perceptions of political interference could undermine the institution's credibility.
Frontrunners emerge amid shifting odds
Three names dominate speculation: Kevin Hassett, Kevin Warsh, and Christopher Waller. Prediction markets and Wall Street analysts have fluctuated in their assessments, but Hassett-a longtime Trump economic adviser-remains the perceived favorite despite recent declines in his odds.
Kevin Hassett: The loyalist contender
Hassett, 63, chaired the White House Council of Economic Advisers during Trump's first term and now leads the National Economic Council. A vocal defender of the administration's economic record, he has downplayed concerns about economic weakness and questioned the impartiality of government data agencies.
His close ties to Trump have fueled skepticism about his ability to lead the Fed independently. Deutsche Bank economists cautioned in a research note that other policymakers might resist his arguments for rate cuts, particularly if they rely on optimistic projections tied to administration policies.
"The way you've got to drive interest-rate movements is with consensus based on the facts and the data."
Kevin Hassett, CNBC interview
Some within the Trump administration have privately questioned whether Hassett possesses the necessary skills to steer the central bank, though he has publicly affirmed the Fed's independence.
Kevin Warsh: The Fed critic with Trump ties
Warsh, 55, served as a Fed governor from 2006 to 2011 and is now a fellow at the Hoover Institution. A board member of UPS, he briefly surpassed Hassett in prediction markets this month before slipping to second place.
Once known for his hawkish stance on inflation, Warsh has recently advocated for lower rates, arguing that the Fed should reduce its balance sheet to ease monetary policy. His sharp critiques of the central bank's reliance on data and its asset holdings have intensified since emerging as a contender.
Trump praised Warsh in a Wall Street Journal interview, noting his support for rate cuts. Warsh's family connections-his father-in-law, billionaire Ronald Lauder, is a longtime Trump donor-could further bolster his candidacy.
Christopher Waller: The insider's choice
Waller, 66, a current Fed governor nominated by Trump in 2020, has gained traction after meeting with the president. Unlike Hassett and Warsh, he lacks personal ties to Trump but is viewed as a steady hand with institutional credibility.
Skyler Weinand, chief investment officer at Regan Capital, called Waller "the more sensible choice," noting that his selection could allow Trump to fill two additional Fed board seats next year, including one vacated by Stephen Miran.
Trump described Waller as "great" after their meeting, though he stopped short of endorsing him outright.
Other names in the mix
Speculation has also included BlackRock executive Rick Rieder and Treasury Secretary Scott Bessent, though neither has gained significant momentum. The final decision will hinge on Trump's priorities: loyalty, market confidence, or a blend of both.
Wall Street's verdict looms large
Regardless of the choice, financial markets will ultimately judge the new chair's success. Investors will scrutinize their ability to balance political pressures with the Fed's mandate for stable prices and maximum employment-a challenge that may define the central bank's trajectory for years to come.
