The search for a new Federal Reserve chair is entering its final stages as President Donald Trump prepares to select a successor to Jerome Powell, whose term ends in May. The position comes at a critical juncture for the U.S. economy, as the central bank navigates political pressure, internal debate over interest rates, and concerns over its credibility.

Kevin Hassett: Trump Loyalist and Economic Adviser

One of the leading contenders is Kevin Hassett, a longtime conservative economist and former chair of the White House Council of Economic Advisers. Now leading the National Economic Council, Hassett, 63, has been a staunch defender of Trump’s economic policies, often downplaying signs of economic weakness and questioning the impartiality of key economic data sources.

While early prediction markets favored Hassett, his odds have dipped recently. Analysts have raised questions about his independence, noting that his close ties to Trump could make consensus-building at the Fed challenging. Deutsche Bank economists warned that Hassett might struggle to persuade other policymakers to prioritize inflation control over the administration’s interest-rate agenda.

Hassett emphasized in a recent CNBC interview that the Fed’s independence is “really, really important,” while suggesting that interest rates still have room to decline.

Kevin Warsh: Former Fed Governor and Critic

Kevin Warsh, 55, a former Fed governor (2006–2011) and Hoover Institution fellow, has re-emerged as another top candidate. Warsh briefly surpassed Hassett in prediction markets earlier this month, though he now sits in second place.

Known for his critical views of the Fed, Warsh has argued for what he calls “regime change,” advocating adjustments to the central bank’s balance sheet to reduce short-term interest rates. While he was historically considered “hawkish” for favoring higher rates, he is now perceived as more supportive of lower borrowing costs in the near term.

Warsh also has familial ties to Trump’s network—his father-in-law, billionaire Ronald Lauder, is a longtime ally and donor.

Christopher Waller: Fed Insider and Sensible Choice

Christopher Waller, a current Fed governor nominated by Trump in 2020, has recently met with the president and gained attention in prediction markets. At 66, Waller has stressed that the Fed still has room to lower interest rates, though he lacks the deep personal connections that benefit Hassett and Warsh.

Wall Street analysts have praised Waller’s independence from the White House, seeing him as a “more sensible choice” who could stabilize the Fed while providing the administration some flexibility. Selecting Waller could also free up two board positions for Trump to fill in the coming year, as Fed governor Stephen Miran’s term expires.

Other Contenders and Considerations

Additional names mentioned in discussions include BlackRock executive Rick Reider and even Treasury Secretary Scott Bessent, though the two Kevins and Waller remain the front-runners.

The decision will have significant implications for both monetary policy and financial markets, as investors closely watch how the Fed will balance independence with political pressure for lower interest rates. Ultimately, Wall Street may serve as the final arbiter of the success of the next Fed chair.