Trump Finalizes Federal Reserve Chair Selection Process with Last Candidate Interview

The Federal Reserve chair selection process has reached its decisive phase with Treasury Secretary Scott Bessent’s January 11, 2026 announcement revealing that three of the four shortlisted candidates have already been interviewed, leaving Rick Rieder as the sole remaining candidate for a final interview before President Trump makes his selection [1][2]. This development represents the culmination of a deliberate evaluation process that Bessent himself helped shape, reflecting the administration’s systematic approach to one of the most consequential economic appointments in U.S. monetary policy history.

The candidate shortlist reveals a carefully constructed balance between administration loyalty and institutional credibility. Kevin Hassett, currently serving as Director of the National Economic Council and Trump’s top economic adviser, represents the closest alignment with the administration’s supply-side economic philosophy [1][3]. His candidacy signals a potential shift toward more politically integrated monetary policy decision-making. Kevin Warsh, a former Morgan Stanley banker who served on the Federal Reserve Board from 2006 to 2011, brings Wall Street perspective and prior Fed experience, though his previous tenure was marked by often dissenting from consensus positions [1]. Christopher Waller, one of the current Fed governors, has been a consistent advocate for Federal Reserve independence and data-driven policy decisions, positioning him as the institutional continuity candidate [1][2]. Rick Rieder, as BlackRock’s Global Fixed Income CIO, would bring the largest asset manager’s perspective to monetary policy, though his lack of direct government service experience distinguishes him from the other contenders.

President Trump’s January 8, 2026 statement to the New York Times—“I have in my mind a decision. I haven’t talked about it with anybody”—suggests the selection process may be more advanced than publicly communicated, with the final interview potentially serving as a formality or confirmation of the already-reached conclusion [3][4]. This timing is particularly significant given that current Fed Chair Jerome Powell’s term does not expire until May 2026, providing the incoming administration ample transition time while creating a window of approximately four months between the expected January announcement and the formal leadership transition.

The selection between these four candidates carries implications that extend far beyond individual personnel decisions, potentially reshaping the Federal Reserve’s institutional character and policy orientation for years to come. The dichotomy between Hassett’s administration-aligned supply-side economics and Waller’s Fed independence advocacy represents the fundamental philosophical tension underlying this selection process. If Hassett is selected, markets may anticipate more coordinated fiscal-monetary policy and potentially accommodative monetary conditions to support growth objectives. Conversely, a Waller selection would signal continuity with the data-driven, institutionally autonomous approach that has characterized recent Fed policy, potentially providing greater predictability for markets focused on inflation targeting.

The timing of this selection—coinciding with the Trump administration’s early days and preceding the Davos World Economic Forum (January 20-24)—suggests strategic considerations around global market messaging and international economic positioning [3]. An announcement before Davos would allow the administration to establish its monetary policy direction before engaging with global financial leaders, potentially affecting dollar valuation and capital flow expectations.

Rick Rieder’s position as the final interview candidate is particularly noteworthy given BlackRock’s unique status as the world’s largest asset manager. His selection would raise novel questions about potential conflicts of interest and the intersection of massive asset management perspectives with monetary policy formation, given BlackRock’s role in managing trillions of dollars across fixed income markets that the Fed directly influences through its policy decisions.

The selection process introduces several material risk considerations for market participants and economic stakeholders. Policy uncertainty remains elevated as the divergent backgrounds of the candidates signal potentially very different monetary policy paths, ranging from more politically integrated approaches under Hassett to independence-preserving approaches under Waller [3][4]. Financial markets historically exhibit heightened volatility around major Fed leadership transitions, and this cycle may be amplified by the candidates’ contrasting policy philosophies.

Timeline risk deserves particular attention, as any deviation from the expected January announcement window could trigger additional speculation and market uncertainty. The confirmation process following the nomination—even after Trump’s expected selection—will introduce additional uncertainty through Senate Banking Committee hearings and potential partisan debate over the nominee’s qualifications and policy positions. Investors should be aware that historical precedent shows Fed chair announcements generate short-term volatility across multiple asset classes, including equities, bonds, and currency markets.

The structured timeline—with approximately three weeks remaining before the expected announcement—provides opportunity for market participants to assess portfolio positioning in interest-rate sensitive sectors and prepare for potential volatility scenarios [3]. Understanding the policy implications of each candidate’s background allows for scenario-based planning across multiple potential outcomes.

The extended period between the expected nomination and Powell’s May 2026 term end provides orderly transition potential, reducing the risk of sudden policy disruption while allowing markets to digest and price in the selection implications well before any actual policy changes occur.

The Federal Reserve chair selection process has reached its final stage with one candidate interview remaining before President Trump’s anticipated January 2026 announcement. Treasury Secretary Scott Bessent confirmed the administration has narrowed its search to four candidates: Kevin Hassett (NEC Director), Kevin Warsh (former Fed Governor and Morgan Stanley executive), Christopher Waller (current Fed Governor), and Rick Rieder (BlackRock Global Fixed Income CIO) [1][2]. Trump’s recent comments suggest the decision may already be finalized internally, with the final interview potentially serving as confirmation rather than substantive evaluation.

The candidates represent distinct policy orientations and institutional backgrounds that would shape the Fed’s approach to monetary policy, inflation management, and institutional independence differently. Market participants should monitor announcement timing closely—particularly relative to the Davos forum—and prepare for potential volatility around the formal nomination and subsequent Senate confirmation process. The selection carries significant implications for interest rate trajectories, dollar valuation, banking sector regulation, and overall monetary policy direction.