Trump's Fed Chair Shortlist: 11 Candidates Under Consideration

Trump Administration's Fed Chair Search

• 🎯 The Trump administration is considering 11 individuals to replace Fed Chair J. Powell when his term expires in May.
• 💡 Three previously undisclosed names have emerged: David Zervos (Jefferies chief market strategist), Larry Lindsey (former Fed Governor), and Rick Rieder (BlackRock chief investment officer for fixed income).
• 🔍 These new names join eight other candidates previously confirmed by CNBC, including Nikki Bowman, Chris Waller, Philip Jefferson, Kevin Hassett, and Kevin Warsh.

The Selection Process

• ✍️ Treasury Secretary Steven Mnuchin is interviewing candidates to narrow down the list before presenting it to the President.
• ⏳ The process is described as deliberative, suggesting a decision is not imminent and could take considerable time.
• ⚠️ A prolonged process may make it less likely for a new Fed chair to be approved by the Senate before Powell's term ends.

Market Confidence and Candidate Profile

• 📊 The administration aims to select a candidate with the confidence of the markets to avoid causing instability.
• ⚖️ A key question for the market is whether the President will appoint someone more loyal to the administration than to the institutional goals of the Federal Reserve.
• 📈 Many candidates on the list have advocated for Fed reform and most have supported its independence, possessing significant experience in monetary policy, markets, finance, or regulation.

Powell's Stance and Potential Impact

• 🗣️ Despite frequent criticism of J. Powell, President Trump has recently backed off suggestions of replacing him before his term ends.
• 📉 Powell's firm stance on the potential inflation from tariffs is seen by some as helping to keep inflation expectations under control.
• 💡 The discussion touches on the idea that a Fed chair who embraces the administration's vision of policy leading to lower inflation and higher growth would be preferred.

Market Expectations and New Names

• 📈 Futures markets show a small probability (2.7%) of a 50 basis point rate cut, with a 97% probability for a 25 basis point cut, indicating a shift in Fed funds futures.
• 📊 Current betting odds suggest Chris Waller is a leading candidate, followed by Kevin Hassett and Kevin Warsh.
• 🌟 The inclusion of new names like Zervos and Rieder expands the pool, with the market watching to see if the President seeks a candidate aligned with his policy vision.