The race to choose the next Chair of the Federal Reserve (Fed), the most powerful central bank in the world, is officially underway. 

Jerome Powell’s (current chair of the U.S. Fed) term ends in May 2026, and President Donald Trump is expected to announce his pick early next year.

For global markets, everyday borrowers, and even crypto investors, this choice matters enormously.

The Fed chair influences interest rates, inflation, bank rules, and economic stability. Their decisions affect everything from mortgage costs to stock prices to the volatility of Bitcoin. This is why investors and policymakers are closely monitoring every step of the Fed chair selection process.

In October 2025, Treasury Secretary Scott Bessent confirmed a shortlist of five contenders. Each comes from a very different background: some are career economists, others are political allies, and some are seasoned financial market executives. Their approach could define the tone of U.S. monetary policy for years.

This article breaks down the candidates for the next Fed chair position, their background, their economic views, and what their leadership might mean for ordinary people, markets, and the global economy in 2026.

Why the Fed Chair Pick Matters So Much

Before you explore the contenders, it’s helpful to understand why the Fed chair position is so important.

The Federal Reserve influences:

• Interest rates: What you pay on credit cards, mortgages, and business loans.
• Inflation: Whether the cost of living rises quickly or stays stable.
• Employment: Whether companies feel confident hiring or need to slow down.
• Financial markets: Stocks, bonds, and crypto all respond to Fed decisions.
• Banking rules: Oversight that keeps the financial system safe.

When a new chair takes over, their view on these issues can shift the entire direction of U.S. policy. Even before they officially start, markets usually react to who the nominee is.

The President nominates the chair, and the Senate must confirm the nominee. Both the choice and the confirmation process are highly political, especially when the President wants rates to move in a specific direction.

The Five Contenders for the next Fed Chair

On December 2, 2025, President Trump hinted that Kevin Hesser could be the next Federal Reserve Chair. However, five names are reportedly still in the running, including:

• Christopher Waller
• Michelle Bowman
• Kevin Warsh
• Kevin Hassett
• Rick Rieder

Each represents a different path for the Fed. Here’s what their selection might mean.

Christopher Waller: The Data-Driven Insider

Christopher Waller currently serves on the Board of Governors of the Federal Reserve, appointed in 2020. He has earned a reputation for being both independent and data-driven, often making early economic calls that later prove correct.

Why Waller Stands Out  

Waller was the first Fed governor in 2025 to call for renewed rate cuts, long before the rest of the committee agreed. At the time, the idea was controversial, with some even calling it premature. But when a series of weak jobs reports arrived in the summer, Waller’s concerns were validated.

Unlike some candidates, Waller does not appear willing to bend to political pressure, even though his current stance aligns with Trump’s desire for lower rates. Friends say he would not “sacrifice his reputation” for any president.

How Waller Might Lead  

Waller would likely:

• Support rate cuts if inflation continues cooling.
• Avoid political topics like climate policy.
• Seek internal reforms to make Fed operations more efficient.

He may be a “safe” pick in the eyes of markets: experienced, predictable, and academically grounded.

Michelle Bowman: The Regulator With Banking Roots  

Michelle “Miki” Bowman is currently the Fed’s Vice Chair for Supervision, the official responsible for overseeing the safety and soundness of U.S. banks. Trump appointed her to the Board in 2018 and later elevated her to her current role.

Bowman’s Background  

Bowman is a fifth-generation community banker and previously served as the Kansas banking commissioner. Unlike other candidates who come mainly from economics or financial markets, Bowman has extensive experience with smaller banks, which serve local communities.

She also worked in Washington during the George W. Bush administration, which provided her with both policy and real-world banking experience.

Bowman’s Policy Views  

Bowman has:

• Supported rolling back specific capital rules for large banks.
• Pushed to remove climate-risk disclosure standards.
• Favored early interest-rate cuts.
• Dissented in July 2025 when the Fed held rates steady.

Bowman is often seen as more conservative on regulation but more dovish on interest rates. That combination would uniquely shape the Fed.

Kevin Warsh: The Crisis Veteran and Institutional Critic  

Kevin Warsh served on the Federal Reserve Board from 2006 to 2011, making him the youngest governor in Fed history at the time. His experience during the Great Financial Crisis still shapes his perspective.

Warsh’s Track Record  

Warsh was deeply involved in the Fed’s emergency response during the 2008 crisis. This earned him respect inside the institution and credibility on Wall Street. In 2017, he was nearly chosen as Fed chair, losing out to Powell.

Since then, Warsh has become one of the Fed’s most outspoken critics. He has accused the institution of being slow, overly cautious, and stuck in outdated habits.

Warsh’s Economic Stance  

Warsh believes:

• The Fed’s balance sheet is too large.
• The Fed should shrink its asset portfolio quickly.
• Lower rates are possible if the balance sheet is reduced.
• The institution needs fundamental reform.

He once had a reputation as an inflation hawk, but he has recently shifted, more open to rate cuts than in past years. His leadership would likely bring aggressive structural changes to the central bank.

Kevin Hassett: The White House Ally and Policy Architect  

Kevin Hassett, currently Director of the White House National Economic Council, is one of Trump’s closest advisers. He also previously chaired the Council of Economic Advisers and has worked as a Fed economist.

Hassett’s Strengths  

Hassett understands both academic economics and political communication. He is known for shaping growth-focused policy and explaining economic data in simple terms, a valuable skill for a Fed chair.

Hassett’s Views  

Hassett has strongly echoed Trump’s criticisms of the Fed, calling it “behind the curve” for waiting too long to cut rates. He has also argued that the Fed has weakened its own independence and credibility by taking on issues outside its core mandates.

If chosen, Hassett would likely push for:

• Faster interest-rate cuts.
• A sharper focus on inflation and employment.
• Less involvement in political or social agendas.

He would be viewed as the most politically aligned choice.

Rick Rieder: The Market Veteran and Pragmatic Operator  

Rick Rieder is the Chief Investment Officer for Global Fixed Income at BlackRock, overseeing one of the largest bond portfolios in the world. His experience is not in central banking, but in analyzing how Fed decisions impact fundamental markets.

Why Rieder Appeals To Some  

Rieder understands how interest rates, credit markets, and liquidity work on a granular level. When he met with Bessent, the Treasury Secretary was impressed by Rieder’s ability to manage large teams and navigate complex market conditions.

Rieder’s Views  

Rieder has said:

• The Fed should be more “innovative”.
• Independence is essential.
• Economic conditions justify larger, faster rate cuts.

He has argued for half-point cuts when the Fed opted for quarter-point ones.

His leadership would bring a practical, market-oriented lens to Fed decisions.

How the Next Chair Could Change Monetary Policy  

Depending on who becomes chair, the Fed’s approach in 2026 could shift in several ways.

Interest Rates  

A more dovish chair (e.g., Bowman, Hassett, or Rieder) could push for faster or earlier rate cuts. A more cautious or data-driven chair (e.g., Waller or Warsh) would wait for more unmistakable evidence of cooling inflation.

Regulation  

Bowman would emphasize small-bank stability. Warsh would likely overhaul the Fed’s internal framework. Rieder might push for rules that better reflect the realities of the financial market.

Crypto and Markets  

While none of the candidates focus on crypto, market volatility, including Bitcoin, is heavily influenced by:

• Rate cuts (bullish for risk assets).
• A more predictable Fed (bullish for investor confidence).
• Any moves that affect liquidity.

A dovish chair could indirectly support crypto markets.

Kevin Hassett emerges as frontrunner in Trump’s search for the next Fed chair

President Donald Trump recently hinted that Kevin Hassett, his former Council of Economic Advisers chair and current National Economic Council director, could be his choice to replace Jerome Powell as Federal Reserve Chair.

The remark comes amid growing speculation over the Fed’s next leader, as the central bank navigates internal divisions and an evolving economic landscape. While Hassett has emerged as the frontrunner, five candidates reportedly remain under consideration.

The decision arrives at a pivotal time for the Fed, which faces upcoming retirements, leadership rotations, and renewed debates over its independence. Economists suggest that a Hassett-led Fed would likely adopt a more dovish stance, potentially paving the way for interest rate cuts in 2026 and beyond.

Next Fed Chair FAQs

When does Jerome Powell’s term as Fed Chair end?

Powell’s term ends in May 2026. President Trump is expected to choose a successor before the end of this year, so the Senate has time to confirm the nominee.

Who are the candidates to replace Powell?

Treasury Secretary Scott Bessent has confirmed five candidates still under consideration: Christopher Waller, Michelle Bowman, Kevin Warsh, Kevin Hassett, and Rick Rieder. Each offers a different style and policy outlook.

Could the Senate block Trump’s chosen nominee?

It’s possible. The Senate must hold confirmation hearings and approve the choice. If the nominee is perceived as too political or too aggressive in their approach to reforms, the process could become contentious.

When will Trump officially announce the nominee?

President Trump is expected to announce his final decision on the next Federal Reserve Chair in early 2026.