Who will succeed Powell? Federal Reserve Governor Waller becomes the hottest candidate

According to informed sources, the advisory team of U.S. President Donald Trump is looking for a successor to Federal Reserve Chairman Jerome Powell, with Federal Reserve Governor Christopher Waller currently being the most prominent candidate.

Sources indicate that Waller is willing to formulate policies based on forecasts rather than existing data, and he has a deep understanding of the Federal Reserve system, which has impressed Trump's advisors. It is reported that Waller has met with the presidential team to discuss the position but has not yet met with Trump himself.

Informed sources revealed that former Federal Reserve official Kevin Warsh and current White House National Economic Council Director Kevin Hassett are also vying for the position. Powell's term as Federal Reserve Chairman will end in May 2026.

White House spokesperson Kush D'Sai stated in a statement, "President Trump will continue to nominate the most capable and experienced candidates. However, any discussions regarding personnel decisions should be regarded as pure speculation unless made by President Trump himself."

A representative of the Federal Reserve declined to comment.

Stephen Moore, Chairman of the White House Council of Economic Advisers, stated on Thursday, "I believe Governor Waller has performed exceptionally well at the Federal Reserve over the past two years, making accurate judgments regarding inflation forecasts and how the Federal Reserve should adjust policies to address inflation."

It is reported that Trump announced on Thursday the nomination of Moore to the position of Federal Reserve Governor to fill the vacancy left by the sudden resignation of Federal Reserve Governor Adriana Kugler. Trump stated that Moore's term will last until January 31, 2026, while continuing to search for a long-term candidate to fill the position.

On Wednesday, Trump stated that the government had narrowed the list of candidates for Federal Reserve Chairman to three individuals. Trump mentioned that U.S. Treasury Secretary Scott Basset, Vice President JD Vance, and Commerce Secretary Howard Lutnick are all part of the selection committee.

Reports indicate that Hassett has met with Trump to discuss the Federal Reserve Chairman position and left a strong impression on Trump and his team. Warsh ran for Federal Reserve Chairman in 2017 but was ultimately defeated by Powell. Last November, Warsh was also considered for the position of U.S. Treasury Secretary.

Waller Casts a Dissenting Vote

Despite Trump's strong pressure, the Federal Reserve decided last week to keep the benchmark interest rate unchanged, but there were clear internal disagreements, with Waller and Federal Reserve Governor Michelle Bowman casting dissenting votes. Both Waller and Bowman are Trump-nominated members who lean towards a 25 basis point rate cut, citing increasingly evident signs of a weakening labor market.

A few days after the Federal Reserve announced its decision to maintain interest rates, an employment report showed that job growth had sharply slowed over the past three months, providing a basis for Waller and Bowman's dissenting opinions.

Waller's views differ from those of Powell and other decision-makers on the Federal Reserve Committee. These decision-makers have so far maintained that the overall condition of the labor market is good and have been patient in adjusting interest rates to allow the Federal Reserve to continuously assess the impact of Trump's tariff policies on the economy. This viewpoint has dissatisfied Trump, who has repeatedly criticized Powell for failing to cut rates earlierRich Experience at the Federal Reserve

Trump nominated Waller to the Federal Reserve in 2020. Prior to that, Waller served as the research director and executive vice president of the St. Louis Federal Reserve. In 2020, senators supported Waller's nomination to the Federal Reserve Board with a vote of 48 in favor and 47 against.

In 2022, during his tenure as a Federal Reserve governor, Waller engaged in public debates with influential economists outside the Federal Reserve, including former U.S. Treasury Secretary Larry Summers. Waller believed that the Federal Reserve could successfully reduce post-pandemic inflation without significantly increasing the unemployment rate. Ultimately, his views were validated: the inflation rate fell below 3%, and the unemployment rate never rose above 4.2%.

Trump's dissatisfaction with Powell raised questions about whether his next nominee for Federal Reserve chairman would support the independence of the Federal Reserve's monetary policy. Waller stated in April this year that the independence of the Federal Reserve "is crucial for the proper functioning of the U.S. economy."

He noted that the market, Federal Reserve observers, and consumers have criticized Powell.

Waller stated, "If you don't like being criticized, don't take the job. The president is free to express his views on policy, just like anyone else."

Last month, Waller said in an interview that he had not received any direct information from Trump regarding the position of Federal Reserve chairman.

He mentioned in July, "If the president were to find me and say, 'I want you to take the job,' I would certainly accept. But he hasn't contacted me yet."