Recently, the issue of interest rate cuts has drawn everyone's attention to the candidates for the Chairman of the Federal Reserve. The current Chairman, Jerome H. Powell, was officially sworn in on May 23, 2022, beginning his second four-year term. During his first four years in office, he was also nominated by Trump, and there have been frequent reports that Powell does not heed Trump's orders for interest rate cuts. This time, it is expected that Trump will choose someone more compliant. Trump's term ends on January 20, 2025, which means that if a Chairman who listens to the President is elected, they could serve President Trump for two and a half years.
The election of the Federal Reserve chair mainly goes through three steps:
1. Candidate screening and interviews: led by Secretary of the Treasury Mnuchin. Reportedly, the initial candidate list had 11 individuals, and after multiple rounds of interviews, it has been narrowed down to 5 final candidates as of October.
2. Presidential nomination: The Secretary of the Treasury submits the final list of candidates to President Trump, who will decide on the final nominee. Trump has indicated he expects to make a decision by the end of the year.
3. Senate confirmation: The president's nominee must be approved by the U.S. Senate to take office formally.
Currently, candidate screening has entered the final stage, and the final list includes the following five individuals:
The first is Christopher Waller, the current member of the Federal Reserve Board: appointed by Trump, supports rate cuts but is known for advocating central bank independence.
The second is Michelle Bowman, the current member of the Federal Reserve Board: appointed by Trump, advocates for simplifying bank regulation, and was one of the early officials to support rate cuts.
The third is Kevin Warsh, a former member of the Federal Reserve Board: once a popular candidate for chair in 2017, currently calling for 'systemic reform' of the Federal Reserve, aligning closely with the views of the current Treasury Secretary.
The fourth is Kevin Hassett, the chair of the White House Council of Economic Advisers: a long-time economic advisor to Trump who is highly aligned with the White House's stance on monetary policy.
The fifth is Rick Rieder, a senior executive at BlackRock: a veteran from Wall Street who advocates for larger rate cuts and emphasizes the independence of the Federal Reserve.
The fourth, Hassett, is widely regarded as the frontrunner for the next chair of the Federal Reserve. According to multiple media reports and market prediction data, his probability of being nominated has exceeded 80%, far higher than other candidates such as former Federal Reserve member Kevin Warsh (6%) and current member Michelle Bowman (4%).
Barring any surprises, Hassett should be the next chair of the Federal Reserve.
Trump is expected to announce the final nominee before Christmas on December 25, 2025. Subsequently, the nominee must officially be nominated by the president in early 2026 and submitted to the Senate Banking Committee and the full Senate for a vote, which is expected to take 2 to 5 months. If it passes smoothly, the new chair will officially take office in May 2026 after the current chair Powell's term ends.
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