High-stakes race to lead Fed next
United States President Donald Trump is soon to name the next chair of the Federal Reserve, a decision that could reshape American monetary policy well beyond his current term. With Jerome Powell’s chairmanship ending in May 2026 — and a separate 14-year Board term opening in February 2026 — the White House has entered what officials describe as the final stage of an accelerated selection process.
According to the administration, the shortlist has now narrowed to five candidates. The choice comes at a politically charged moment, with Trump having repeatedly criticised Powell’s handling of interest rates and pressed publicly for faster and deeper cuts. Powell, originally appointed by Trump during his first term and later reappointed by former president Joe Biden, has remained a frequent target of presidential frustration.
The timing is especially sensitive as the Federal Open Market Committee (FOMC) prepares for its December 9–10 meeting. While the White House insists the appointment will be based on competence, former officials and economists have warned that political alignment could carry significant weight.
US Treasury Secretary Scott Bessent, who is overseeing the vetting process, has indicated the announcement may come before Christmas. Trump himself has said he already has a clear favourite.
Why Federal Reserve chair matters
The Federal Reserve chair is the most powerful economic policymaker in the United States. The role shapes interest-rate strategy, steers inflation control, and serves as the global face of US monetary policy. Markets around the world respond instantly to Fed decisions, which affect borrowing costs for mortgages, business loans and government debt.
Beyond rate-setting, the chair plays a leading regulatory role as part of the Federal Reserve Board of Governors, helping shape oversight rules for banks and financial institutions. The chair regularly testifies before Congress and works alongside other regulators on financial stability.
The Fed chair leads the FOMC, which sets the federal funds rate — the benchmark for US borrowing. Whoever Trump nominates must be confirmed by the Senate, now controlled by Republicans. Powell may remain on the Fed Board for up to two additional years after stepping down as chair, unless he chooses to resign entirely.
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The Five Final Contenders:
Kevin Hassett
Kevin Hassett has emerged as the apparent frontrunner, according to White House advisers and market analysts. Allies close to Trump believe Hassett’s longstanding relationship with the president and his alignment with Trump’s economic instincts make him a strong fit. Supporters also believe he would embrace more aggressive interest-rate reductions.
Hassett has deep roots in Republican economic policy, having advised George W Bush, John McCain and Mitt Romney. During Trump’s first term, he served as chair of the Council of Economic Advisers and later returned during the Covid-19 emergency.
However, Hassett has faced criticism. In 2020, he promoted a model suggesting Covid-19 deaths would fall to zero by mid-May — a projection widely challenged. Earlier, he co-authored the optimistic investment book Dow 36,000, which took more than two decades to materialise.
Hassett has openly signalled his willingness to take the role. In an interview, he said, “I want to serve my country and I want to serve my president. But you know, we’ll see how it goes. There are a lot of great candidates.” He added that he would “be cutting rates right now” because “the data suggests that we should.”
Markets responded swiftly to reports of his frontrunner status, with Treasury yields falling and the 10-year yield dipping below 4 per cent.
Christopher Waller
Christopher Waller is currently a Federal Reserve governor and brings extensive internal experience. He joined the Board in December 2020 following a narrow 48–47 Senate confirmation — the closest such vote in decades.
Waller recently confirmed discussions with the Treasury Secretary, saying, “I talked to Scott about 10 days ago. We had a nice, a great, meeting.”
Kevin Warsh
Kevin Warsh combines Wall Street and central-bank experience. A former Morgan Stanley banker, he served in George W Bush’s White House before joining the Fed Board in 2006. During the 2008 financial crisis, he acted as the Fed’s main liaison with Wall Street, coordinating emergency stabilisation efforts.
Warsh stepped down in 2011 with a strong reputation as a crisis manager. Trump previously considered him for the Fed’s top job in 2017 before selecting Powell. This September, Trump again named Warsh among his “top three” choices.
Michelle Bowman
Michelle Bowman currently serves as the Fed’s vice chair for supervision and is one of the central bank’s most influential regulatory voices. First appointed by Trump in 2018 and reappointed in 2020, she has prior experience at the Department of Homeland Security and FEMA. Her family background in community banking shapes her regulatory outlook.
Bowman has demonstrated a willingness to challenge consensus. In 2024, she became the first Fed governor since 2005 to oppose a rate decision. She dissented again this year, joined by Waller.
Rick Rieder
Rick Rieder is the only finalist from outside the Federal Reserve system. As BlackRock’s global fixed-income chief investment officer, he oversees roughly $2.4 trillion in assets. His career began at Lehman Brothers before moving to BlackRock.
Rieder has served on the Fed’s Investment Advisory Committee on Financial Markets, offering insight from large financial institutions. His appointment would represent a sharp departure from traditional central-bank career paths.
Trump’s fraught relationship with Fed
Since returning to office in January, Trump has repeatedly attacked Powell’s pace of rate adjustments, branding him “Too Late” and pushing for faster easing. The White House denies that political loyalty will determine the next appointment.
Still, unease remains among economists after Trump discussed removing central-bank officials in the past. Trump has said he is weighing both predictable and unexpected candidates, stating, “We have some surprising names and some standard names that everybody’s talking about.”
In a lighter moment, Trump joked that he wanted Bessent to take the job, but the Treasury Secretary declined.
Last week, Trump described Powell as “grossly incompetent” and added that he would have preferred to remove him earlier. He also joked that if Bessent failed to deliver lower rates, he might consider dismissing him as well.
Why the timing is critical
The handover comes during a period of growing disagreement within the Fed. After keeping rates unchanged for most of 2025, policymakers introduced modest 25-basis-point cuts in September and October.
The December FOMC meeting will take place amid mixed economic signals — softening labour data, persistent inflation pressures and gaps in federal economic reporting. Officials remain divided on whether further cuts are justified.
Former White House press secretary Sean Spicer framed the political importance of the post, saying, “President Trump saw in the first term how important it was to have people who understand his direction and priorities, especially in key positions like FBI director and Federal Reserve chair.”
When the final decision will come
Bessent has interviewed nearly a dozen candidates since the summer. The final five will now be reviewed by White House Chief of Staff Susie Wiles and US Vice-President JD Vance.
After Trump makes his selection, the nominee must pass Senate confirmation, expected in early 2026. If Powell steps down from the Board entirely, Trump would gain the opportunity to appoint an additional governor.
As Bessent put it, there is “a very good chance” the final decision will be announced before Christmas. Trump has echoed that certainty, saying, “I think I already know my choice.”