President Trump indicated on Wednesday that the selection process for the new Federal Reserve Chair, which began last September and once involved up to 11 candidates, is nearing its conclusion, and hinted that he has a preferred candidate in mind. Trump stated, "I would say it's down to three candidates for Fed Chair, no, two. And I might even tell you that in my mind, it's probably down to one." He also mentioned he will announce the nomination for the new Fed Chair "in the near future" and revealed the next Chair will be a man and "will be a highly respected person."
It is widely believed that the finalists include former Federal Reserve Governor Kevin Warsh, current Governor Christopher Waller, National Economic Council Director Kevin Hassett, and BlackRock's Head of Global Fixed Income Rick Rieder. During the interview, Trump said the last interviewee, Rieder, was "impressive," but he also praised all the candidates. However, when discussing the Fed Chair selection process, Trump pointed out, "It's surprising how people change their behavior once they take office. In a way, it's a betrayal, which is really bad, but they have to do what they think is right." He claimed that his and Treasury Secretary Besant's interviews with every candidate "went great."
Furthermore, Trump again hinted that he hopes Hassett remains in his current position. Trump said, "Actually, I'd prefer to keep him [Hassett] in the position he's in now." This aligns with Trump's remarks last Friday, when he stated that if Hassett left the White House, the administration would lose one of its most influential "spokespersons" on economic issues.
The comments regarding the new Fed Chair represent the latest dramatic turn of events following a year of unprecedented turbulence at the Federal Reserve. Although Trump heavily criticized Powell and his colleagues during his first presidential term from 2017 to 2021, he has significantly increased the pressure in 2025. This includes not only more verbal attacks on policymakers but also threats to fire Powell and an actual attempt to remove Governor Lisa Cook. The latter became a topic in a Supreme Court hearing on Wednesday regarding the scope of presidential power over the agency.
With Powell's replacement upon the expiration of his term as Chair in May now almost certain, the key question is whether he will stay on for two more years to complete his remaining term as a Governor. If he chooses to stay, Powell could still influence monetary policy and interest rate decisions and potentially act as a "firewall" against Trump's attempts to control Fed policy. Trump appeared somewhat indifferent to Powell's decision. He stated, "If [him staying] happens, I don't think his life will be very, very pleasant. I think he wants to leave. He hasn't done a good job." Trump again criticized the Fed headquarters renovation project overseen by Powell, which has cost over $2.5 billion. The US Department of Justice has issued a subpoena to Powell regarding this project. Trump said, "I could have done it for $25 million, and it would have been better than what they did."
Hassett's apparent exit makes Rieder a potential dark horse. Notably, Trump's comments last Friday drastically reduced the probability of Hassett, previously considered a frontrunner, becoming Fed Chair. During a White House event that day, Trump told Hassett, "To be honest, if you want to know the truth, I actually want you to stay in the position you're in. If I move you, these Fed people, including our current one, of course, they don't speak out much. I would lose you. That's a serious concern for me." Hassett told media last Sunday that Trump would likely keep him as a White House economic adviser. These remarks effectively rule him out for the next Fed Chair position. Hassett said at the time that there are many good candidates and the president's decision that the White House is the best place for him now is probably correct.
Following Trump's public remarks last Friday about not wanting to reassign Hassett, Krishna Guha, Head of Central Bank Strategy at Evercore ISI, stated in a client note that this news would "push Warsh directly to the forefront of the competition to replace Powell as Fed Chair." Previous reports indicated that Trump was impressed with Warsh in an interview last month and told colleagues during the holidays that he was captivated by Warsh's intellect and handsome appearance.
Meanwhile, prediction markets have significantly increased the probability of Rieder being nominated as the next Fed Chair. Reports suggest Rieder's interview with Trump last week went "quite smoothly." In fact, as early as September 2025, Treasury Secretary Besant had interviewed Rieder, who was already considered a top candidate for the new Fed Chair at that time. Their discussion reportedly focused on two core issues: the current and future direction of monetary policy, and structural reforms related to the Fed's operations.
Rieder currently serves as Senior Managing Director and Global Chief Investment Officer of Fixed Income at BlackRock, bringing extensive financial market experience. He previously mentioned in a media interview, "Whoever ultimately becomes Fed Chair will face many matters requiring innovative responses." Notably, unlike the typical background of Fed Chairs holding PhDs in economics, Rieder, similar to current Chair Powell, lacks an academic title in the field. If ultimately selected, he would continue this non-traditional appointment path.
What likely makes Rieder most appealing to the Trump administration are his rate-cut advocacy and his "atypical" tolerance for deficits and inflation. Regarding monetary policy, Rieder has consistently argued that as the economy evolves, the Fed should lower interest rates to a "neutral level" of around 3%. On fiscal matters, he has repeatedly downplayed market concerns about the US's massive government deficits. Regarding inflation, he has suggested that inflation slightly above target is acceptable if it helps stabilize debt dynamics and maintain employment.
The US Department of Justice's unusual subpoena to current Chair Powell regarding the Fed headquarters renovation project has escalated tensions. Powell countered that it was political retaliation for not cutting rates quickly enough. This incident rapidly intensified the conflict, with US Senate Banking Committee member Thom Tillis warning that any Fed nominee will face the most stringent scrutiny pending the investigation's outcome.
This tense political environment could ironically serve as a "booster" for Rieder. Unlike traditional candidates mired in Washington policy debates, Rieder, as a seasoned Wall Street bond trader, remains detached from political controversies. Insiders note that Rieder is seen as a "safer option" who would likely have an easier time navigating Senate confirmation compared to other candidates.
