Who will be the next Chairman of the Federal Reserve in the United States?

Powell's second term will end in May 2026, and the next Federal Reserve Chairman must be nominated by Trump and confirmed by the Senate. Historically, U.S. presidents typically announce their nominee for the Federal Reserve Chairman 3-6 months before the current chairman's term ends to minimize unnecessary market volatility and impact. However, Trump is expected to nominate the next Federal Reserve Chairman earlier in the second or third quarter. Although the current market believes that candidates such as Waller, Bessen, and Hassett have a higher probability of being nominated, predicting Trump's eventual appointee is quite difficult, as Trump's nomination of Powell in 2017 was also beyond the market's initial predictions. Future tracking can focus on Trump's meetings and interviews with candidates and his related statements.

Powell's second term will end in May 2026, and the next Federal Reserve Chairman must be nominated by Trump and confirmed by the Senate.

Historically, U.S. presidents typically announce their nominee for the Federal Reserve Chairman 3-6 months before the current chairman's term ends to minimize unnecessary market volatility and impact. However, since taking office this year, Trump has continuously expressed dissatisfaction with the current Federal Reserve Chairman, and according to China News Network, Trump stated on June 6 local time that he would "soon" appoint a successor to replace Powell.

One of the potential candidates for the current Federal Reserve is former Federal Reserve Governor and Hoover Institution researcher Kevin Warsh.

Kevin Warsh previously worked at Morgan Stanley, and in 2002, he left Morgan Stanley to join the government under President George W. Bush. From 2002 to 2006, Warsh served as a special assistant to President George W. Bush for economic policy and as executive secretary of the National Economic Council, and from 2006 to 2011, he served as a governor of the Federal Reserve Board. During his tenure as a Federal Reserve governor, based on his experience in the financial industry, Warsh made significant contributions to addressing the 2008 financial crisis. Warsh also worked on Trump's transition team for his second term and was one of the potential candidates for Secretary of the Treasury in Trump's second term, as well as a popular candidate for Federal Reserve Chairman during Trump's first term.

However, Kevin Warsh is known for his hawkish monetary policy stance, and his past monetary policy tendencies and support for the independence of monetary policy may pose certain obstacles to his nomination as the next Federal Reserve Chairman.

Warsh has shown a strong hawkish monetary policy stance, having expressed skepticism about the effectiveness of Chairman Bernanke's QE2 in 2010, and criticized the monetary easing policies led by Yellen for inflating asset prices and encouraging the expansion of U.S. debt. Additionally, on April 25, Warsh delivered a speech in Washington, stating that the Federal Reserve has deviated from its "scope of authority." Combined with Warsh's 2010 article in The Wall Street Journal, he argued that the Federal Reserve has deviated from its "scope of authority," suggesting that monetary policy alone cannot solve U.S. economic problems and that other policymakers need to take more responsibility for promoting economic growth. The Federal Reserve is not an institution for repairing broken fiscal, trade, or regulatory policies. Furthermore, Warsh firmly supports the independence of the Federal Reserve, emphasizing that the operational independence of monetary policy is a wise political and economic decisionIn 2010, Waller also stated that if the Federal Reserve's policies are overly committed or insufficiently fulfilled, the Federal Reserve may lose its hard-won credibility, and monetary policy may lose its significant influence.

Due to his dovish monetary policy tendencies and extensive experience within the Federal Reserve system, current Federal Reserve Governor Christopher Waller is also a strong contender.

Waller joined the Federal Reserve Bank of St. Louis as a research director in 2009. In 2019, Trump announced he would nominate Christopher Waller as a Federal Reserve Governor, and in December 2020, the Senate confirmed Waller's nomination. Waller's term as a Federal Reserve Governor will end on January 31, 2030. Throughout his tenure, Waller's monetary policy has leaned dovishly, supporting expansionary monetary policy and low interest rates. In April of this year, Waller also stated dovishly that if tariffs lead to an economic slowdown and an increase in unemployment, he would support interest rate cuts.

Recently, Bloomberg reported that U.S. Treasury Secretary Janet Yellen is also a potential candidate for Federal Reserve Chair.

On June 11, Bloomberg cited anonymous informed sources revealing that U.S. Treasury Secretary Janet Yellen is one of the leading candidates to succeed the Federal Reserve Chair. The current Treasury Secretary Yellen is a former hedge fund manager, and her position in the White House and Wall Street helps stabilize market sentiment. However, the transition from U.S. Treasury Secretary to Federal Reserve Chair may exacerbate concerns in the U.S. Senate and the market regarding the independence of the Federal Reserve. Additionally, if Yellen were to step down as Treasury Secretary to become Federal Reserve Chair, it would impact the trade negotiations led by Yellen between the U.S. and other countries. The White House has recently denied reports that Yellen is a candidate for the next Federal Reserve Chair, and there remains uncertainty about whether Yellen is on the candidate list.

Kevin Hassett, the current director of the National Economic Council, is also a potential competitor.

From 1992 to 1997, Hassett was an economist in the Federal Reserve's Research and Statistics Division and served as a policy advisor at the U.S. Treasury during the George W. Bush and Clinton administrations. Hassett was the chairman of the White House Council of Economic Advisers during Trump's first term and returned to the White House in April 2020 as a senior advisor to President Trump after the pandemic hit. Hassett currently serves as the director of the National Economic Council. Hassett's extensive economic credentials and his past policy alignment with the Trump administration are his main advantages. However, Hassett's close relationship with Trump and the White House may also raise concerns in the market and the U.S. Senate regarding the independence of the Federal Reserve. Additionally, former World Bank President David Malpass is also seen as a potential candidate due to his close ties with Trump.

Although the market currently believes that Waller, Waller, Yellen, and Hassett have a higher probability of being nominated among the candidates, predicting whom Trump will ultimately appoint is quite difficult.

The market has certain speculations about the next Federal Reserve Chair candidates, but Trump's decisions are often hard to predict. For the 2017 round of Federal Reserve Chair nominations by President Trump, the candidates initially predicted to have a higher probability were Yellen and Waller, but later in September 2017, Powell emerged as a dark horse in the public eye, and subsequently, his chances of winning gradually increased, leading other candidatesUltimately, in November 2017, Powell received the nomination for Chairman of the Federal Reserve. Subsequently, one can track Trump's meetings and interviews with candidates; Trump is expected to nominate the next Chairman of the Federal Reserve earlier in the second or third quarter, and the market may digest the impact of the next Federal Reserve Chairman on the market sooner.

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