With Jerome Powell expected to step down in 2026, attention is quietly shifting to who could become the next Federal Reserve chair and what that choice would mean for interest rates and markets.

Donald Trump has made his position clear. He wants lower rates, looser monetary policy, and a Federal Reserve that is more aligned with his broader economic agenda.

According to current reporting, five names are being considered, but as of December 18, three candidates appear to be emerging as the most serious contenders.

The candidates most often mentioned are Kevin Hassett, former Fed Governor Kevin Warsh, Fed Vice Chair of Supervision Michelle Bowman, and BlackRock’s head of fixed income Rick Rieder. Fed Governor Christopher Waller is also increasingly part of the conversation.

All of the potential candidates publicly stress their commitment to central bank independence, which remains a major concern for economists and global investors. At the same time, there is broad agreement among them that monetary policy should be less restrictive, with lower interest rates over time. That overlap is not lost on the president.

Still, it is worth remembering that the Fed chair holds only one vote out of twelve on the Federal Open Market Committee. Even a chair aligned with Trump’s views cannot unilaterally dictate policy.

Fed reform has long been a priority for Treasury Secretary Scott Bessent, who has consistently argued that the central bank should rethink its role and regulatory reach. That message has been actively pitched to investors and business leaders.

Trump’s broader goal appears to be appointing a Fed chair who is receptive to his economic priorities, including deregulating the banking sector and avoiding tight monetary policy that could slow growth.

According to Reuters reporting from December 18, Kevin Warsh has strong ties within Trump’s inner circle. Kevin Hassett is viewed as a reliable Trump ally with a track record of publicly defending his policies. Christopher Waller is already guiding the Fed toward rate cuts and a narrower interpretation of the central bank’s responsibilities. Rick Rieder, BlackRock’s chief investment officer, is expected to be interviewed before the end of the year.

Whoever ultimately gets the job will step into a difficult position. As The New York Times notes, the next Fed chair will face pressure from the White House, scrutiny from markets, and the challenge of maintaining credibility while navigating a highly politicized economic environment.

If you want a deeper breakdown of each candidate, the full analysis is available here:
https://finance.yahoo.com/news/next-fed-chair-faces-no-174700793.html