Trump to Interview Fed Governor Christopher Waller for Chair; Warsh and Hassett Remain Front-Runners

On December 16, 2025, the Wall Street Journal reported President Trump’s upcoming interview with Fed Governor Christopher Waller for the Fed chair role [1]. This development unfolds as Jerome Powell’s chair term nears its end in May 2026, with the shortlist narrowed to five candidates: Christopher Waller (sitting Fed governor), Kevin Warsh, Kevin Hassett, Fed Vice Chair Michelle Bowman, and BlackRock’s Rick Rieder [2][3][4]. Led by Treasury Secretary Scott Bessent, the selection process may conclude with an announcement before Christmas [3][4].

Waller, a 2020 Trump appointee, brings institutional Fed experience (previously at the Federal Reserve Bank of St. Louis) and a research background in central bank policy rules [8]. His cautious stance on rate cuts—supporting easing but emphasizing data dependence—differs from Trump’s public demand for sharp cuts (to 1% or lower) [5][6][9]. The front-runners, Hassett and Warsh, have distinct profiles: Hassett, a close Trump advisor, has emphasized Fed independence despite the president’s rate preferences [9][4]; Warsh, a former Fed governor, has Wall Street backing (including JPMorgan’s Jamie Dimon) and has critiqued current Fed policy [7]. Market focus on potential policy shifts under new leadership is high, with sensitivity to interest rate expectations [0].

1. Candidate Diversity
   : The shortlist balances current Fed officials (Waller, Bowman) with outsiders (Warsh, Hassett, Rieder), reflecting an attempt to reconcile institutional knowledge and political alignment.
2. Policy Tension
   : Waller’s cautious rate cut approach contrasts with Trump’s aggressive demands, highlighting potential internal dynamics if he is selected.
3. Independence Narrative
   : Hassett’s public commitment to Fed autonomy [9] may mitigate concerns about political interference, but uncertainty remains regarding how other candidates would navigate Trump’s pressure.
4. Market Sensitivity
   : The ongoing selection process introduces short-term volatility risks, particularly in bond markets tied to rate expectations [0].

• Risks
  : Short-term market volatility due to policy uncertainty [0]; potential erosion of Fed independence if the new chair aligns closely with Trump’s preferences; inflationary pressures from aggressive rate cuts.
• Opportunities
  : Easier monetary policy under new leadership could benefit equity markets; an insider like Waller may provide policy continuity; fresh perspectives from outsiders could address perceived Fed inefficiencies.

The Fed chair selection process is ongoing, with a shortlist of five candidates and front-runners Warsh and Hassett. Trump’s interview with Waller adds a new layer to the process, which may conclude before Christmas. The appointment could shift monetary policy, impact market stability, and test Fed independence. Critical context includes Powell’s term ending May 2026, the 14-year governor term opening in February 2026, and Bessent’s leadership of the selection process [3].