The search for the new head of the US Federal Reserve is coming to an end, in a process with high political and economic stakes. US President Donald Trump is expected in the coming weeks to announce the successor of Jerome Powell, whose term as Fed chairman ends in May.
The new head will take office at a particularly challenging time, as the central bank faces both political pressure and internal disagreements over the future course of interest rates. The work of the new president is further complicated by credibility issues.
Trump has made it clear that he wants lower interest rates, putting unusual pressure on the Fed and raising questions about whether the next head will operate independently. Once nominated, the nominee will need to be approved by the Senate.
Kevin Hassett, a longtime conservative economist and key adviser to Trump, is seen as one of the main contenders.
The 63-year-old served as chairman of the Council of Economic Advisers during Trump's first term and now heads the National Economic Council. Hassett has systematically defended Trump's economic policies by questioning evidence showing a slowdown in the U.S. economy. However, his close relationship with the president has raised doubts about his independence at the Fed, while analysts estimate that he may find it difficult to convince other members of substantial interest rate cuts. He has stressed that the Fed's independence is "extremely important".
Kevin Warsh, former Fed governor from 2006-2011, has also returned to the spotlight. The 55-year-old economist, affiliated with the Hoover Institution, has been highly critical of the Fed, calling for "regime change." Although in the past he was considered a "hawk", he now appears more receptive to interest rate cuts.
He also maintains family relations with Trump's entourage.
Christopher Waller, a current Fed member and appointed by Trump in 2020, has boosted his chances after a recent meeting with the president. He has argued that there is room to cut interest rates further and is seen by the market as more distant from the White House. The list also includes BlackRock's Rick Rieder, head of fixed-income investments with oversight of more than $2.4 trillion in assets.
With a long run on Wall Street and limited political experience, he has advocated for lower interest rates, estimating that they can be reduced without a resurgence in inflation. Ultimately, regardless of who is chosen, the markets are expected to be the ultimate arbiter of the new Fed chairman's success.
Source: insider.gr
