Trump is down to 'maybe one' name for the next Fed chair. Meet the short list.
Lucas Jackson/Reuters; Andrew Harnik and Bloomberg/Getty Images
- President Donald Trump has signaled that his efforts to replace Fed chair Jerome Powell are nearing an end.
- Trump said his shortlist may be down to just a single name.
- Trump's search was upended by the recent revelation that Powell is under criminal investigation.
President Donald Trump has signaled that his mind might be made up, but prediction markets are all over the place when it comes to who will be the next chair of the Federal Reserve.
On Wednesday, Trump said that his monthslong search to replace Chair Jerome Powell may be near its end.
"I'd say we're down to three, but we're down to two. And I probably can tell you, we're down to maybe one, in my mind," he told CNBC's Joe Kernen on the sidelines of the World Economic Forum in Davos.
It's not clear who Trump was talking about, but online bettors seem to have one name in mind.
By Friday, Rick Rieder, chief investment officer of global fixed income at BlackRock, was leading both major prediction markets, Kalshi and Polymarket. The Wall Street veteran started January at roughly 5%.
Trump's search was upended by the criminal investigation into Powell, which the Fed Chair has said is in retaliation for not doing what the president wanted.
Days later, Trump appeared to take an early frontrunner out of contention by publicly proclaiming that he would like economic advisor Kevin Hassett to remain at the White House.
Here's where Trump's search stands and who is on top of his list.
Lucas Jackson/Reuters
A big Wall Street name has shot up prediction markets as Trump potentially nears a final decision.
Rieder has spent decades on Wall Street, dating back to his time at Lehman Brothers. As of January 23, he had surged into the lead on both Kalshi and Polymarket on the heels of a Bloomberg report that his résumé and openness to "making changes at the Federal Reserve" boosted his candidacy.
Unlike the other three reported finalists, Rieder has never worked at the Fed in any capacity.
Rieder is responsible for managing roughly $2.4 trillion in assets, per BlackRock. He's served as a member of the Fed's Investment Advisory Committee on Financial Markets.
During an interview with CNBC in January, Rieder said he hoped interest rates would be lowered closer to 3%.
"I think there's a lot of drama, there's a lot of discussion about it. I think at the end of the day, whoever's in that seat, not just that seat, the whole committee, they're going to look at the data, evaluate the data and make whatever the right decision is," he said.
Ann Saphir/Reuters
Trump has long praised Warsh, one of "the two Kevins" on his shortlist to replace Powell.
In December, Trump told The Wall Street Journal that Warsh was at the top of his list. Warsh had led prediction markets at multiple points, but has now fallen behind Rieder.
"I think you have Kevin and Kevin. They're both—I think the two Kevins are great," he told the publication. "I think there are a couple of other people that are great."
Back in his first term, Trump reportedly considered Warsh to lead the Fed before he nominated Powell in 2017.
Warsh spent his early years at Morgan Stanley, working as a specialist in mergers and acquisitions. President George W. Bush nominated him to the Fed in 2006 after Warsh served as an economic advisor in the Bush White House.
Drawing on his Wall Street ties, Warsh played a pivotal role in the central bank's response to the 2008 global financial crisis. When he left the Fed in 2011, the Times called him the Fed's chief liaison to Wall Street.
Patrick Semansky/AP
Fed Gov. Christopher Waller, who currently serves alongside Powell on the central bank, has previously said that he thought his interview went well.
In late November, Waller told Fox News he was pleased about his conversation with Treasury Secretary Scott Bessent, who has led Trump's search process.
In mid-December, CNBC reported that unnamed senior administration officials said Waller had a "strong interview" with Trump himself.
Despite the once-optimistic press, Waller has been nowhere near the top of prediction market odds in months. As of late January, he's hovering around 10% at both Polymarket and Kalshi.
Waller, a longtime regional Fed official, was seen as a convention pick when Trump nominated him to the central bank in 2019. Simultaneously, Trump also nominated Judy Shelton, a former campaign advisor and a Fed critic. The fight over Shelton's nomination soon spilled over onto Waller's.
In December 2020, the Senate confirmed Waller 48-47, the narrowest margin for any Fed governor since 1980, per The New York Times.
In July, Waller joined Gov. Michelle Bowman (another Trump first-term pick) in opposing the Fed's decision not to cut interest rates, the first dual dissent in more than 30 years.
Jim Watson/AFP via Getty Images
Kevin Hassett, one of Trump's top economic advisors, was once the runaway favorite to be picked.
Hassett's odds in the prediction markets collapsed after Trump publicly expressed a desire to keep his longtime economic advisor at the White House.
"I actually want to keep you where you are, if you want to know the truth," Trump said at a White House event, when he saw Hassett, director of the National Economic Council, in the audience in mid-January. "I just want to thank you, you were fantastic on television the other day."
The criminal probe into Powell also led some Fed watchers to conclude that it was unlikely someone so close to the White House would be able to clear the Senate confirmation process.
Before joining Trump's orbit, Hassett advised a succession of Republican presidential nominees on economic policy, including George W. Bush, John McCain, and Mitt Romney.
During Trump's first term, Hassett served as director of the president's Council of Economic Advisors. He returned to the White House during the COVID-19 pandemic and was severely criticized for publishing a model showing coronavirus deaths hitting zero by May 15, 2020.
In October 1999, Hassett cowrote with journalist Jason Glassman "Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market." Some economists have heavily criticized the book, largely because the index took more than 22 years to reach that threshold.
Reuters
Trump's shortlist at one point reportedly had almost a dozen names.
CNBC previously reported that the following are no longer under consideration: David Zervos, Managing Director and Chief Market Strategist at Jefferies; Dallas Fed President Lorie Logan; former St. Louis Fed President James "Jim" Bullard; Fed Gov. Philip Jefferson; and Marc Sumerlin, a former economic advisor to President George W. Bush.
Former Fed Gov. Larry Lindsey told CNBC that he withdrew from contention.
Bowman was once considered a contender but has not been reported as a finalist.
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