Evaluating and Criticizing Prospective Federal Chair Nominees

Potential Candidates for the Federal Reserve Chairmanship

As the term of current Federal Reserve Chair, Jerome Powell, comes to an end in May 2026, speculation about his successor is mounting. The leading contenders include Rick Rieder, Kevin Warsh, and Christopher Waller.

Rick Rieder, BlackRock's Chief Investment Officer for global fixed income, is known for his market-oriented and pragmatic approach. Kevin Warsh, a former Fed governor, has a background shaped during the financial crisis and is often perceived as centrist, with a willingness to adjust policy for stability. Christopher Waller, a current Fed governor and a Trump administration appointee, may have a more hawkish or moderate stance due to his research background and association with the prior administration's preferences.

Market reaction to these potential appointments is likely to centre on communication and credibility. Allianz advisor Mohamed El-Erian highlights Rieder and Warsh's "really good understanding of the markets" and excellent communication skills, both crucial for managing market expectations and volatility.

A wild card candidate for the Federal Reserve chairmanship is Jim Bullard, the former head of the St. Louis Fed from 2008 to 2023. Other candidates on the list include Scott Bessent, Chris Waller, David Zervos, Kevin Hassett, Kevin Warsh, Stephen Miran, Miki Bowman, Philip Jefferson, Judy Shelton, Marc Sumerlin, and Larry Lindsey.

Chris Waller, a sitting Fed governor since 2020, is currently the leading candidate for the Fed chairmanship. Stephen Miran is serving as a temporary member of the Federal Reserve Board of Governors. Philip Jefferson, the Fed's current vice chair, has made the Trump administration's list of possible candidates, but his appointment by Joe Biden and support for Powell's monetary policy strategy make him an unlikely choice.

Judy Shelton is a controversial candidate with unorthodox views on monetary policy, who was narrowly not confirmed as a Fed governor in 2019. Marc Sumerlin is an old-school Republican economist who has suddenly appeared on the list of candidates, but his views are hard to know as he declined a nomination for a Fed governorship in the past. Larry Lindsey is a qualified candidate with a Harvard PhD in economics, serious stints at Treasury under Reagan and both Bushes, and a Fed governorship from 1991 to 1997, but his inclusion in the list feels like room filler. Kevin Hassett was once mostly famous for co-writing the bestselling 1999 book "Dow 36,000" but is now primarily known as Trump's premier economist cheerleader. Kevin Warsh has been a frontrunner for Trump's Fed chair for almost a decade.

Former President Donald Trump has been reported to favour Kevin Warsh and Kevin Hassett, along with two unnamed candidates, indicating at least some candidates have ties to his preferences, potentially implying influence of "Trumpism" in selection. However, it's important to note that Trump’s list notably excludes Scott Bessent, who is conducting the candidate search but prefers to remain Treasury Secretary.

In conclusion, the Fed chairmanship contenders combine varying degrees of market experience, political affiliations (notably some Trump connections), and communication strengths, which are critical factors influencing market reaction and monetary policy expectations. The final decision is expected to be made by the end of 2025.

Summary table:

| Candidate | Dovishness* | Trumpism Association | Market Reaction Potential | |--------------------|-------------------|----------------------|------------------------------------| | Rick Rieder | Likely pragmatic | On Trump’s list of 11 candidates | Positive due to market experience and communication skills[1] | | Kevin Warsh | Centrist/moderate | Favored by Trump | Strong confidence from experience and Fed background[1][3] | | Christopher Waller | Possibly moderate/hawkish | Trump 1.0 appointee | Monetary policy expertise, moderate market impact[2] |

*Dovishness inferred indirectly; explicit ratings not available in sources.