The race to replace Jerome Powell as Federal Reserve Chair has a surprise front-runner—at least among corporate America's elite. A stunning 81% of CEOs polled at the recent Yale CEO Summit chose Fed Governor Chris Waller as their preferred candidate, far outpacing better-known contenders Kevin Hassett and Kevin Warsh.

The poll result has injected new life into Waller's candidacy at a critical moment. President Trump is expected to announce Powell's successor in early 2026, and what once seemed like a two-horse race between Hassett and Warsh is suddenly looking more complicated.

Why CEOs Are Backing Waller

The Yale poll results may seem surprising—Waller has generated far fewer headlines than Hassett (currently White House economic adviser) or Warsh (a former Fed governor with close ties to Trump's inner circle). But CEOs cited several factors driving their preference:

Credibility with Markets: Unlike political appointees, Waller has spent years as a Fed governor and previously served as research director at the St. Louis Fed. He understands how monetary policy actually works, not just how it's debated in political circles.

Track Record on Rates: Waller has consistently advocated for data-dependent policy and was among the first Fed officials to publicly support rate cuts when inflation began cooling. This pragmatic approach appeals to business leaders who prize predictability.

Ability to Cut Credibly: Perhaps most importantly, CEOs believe Waller is the only candidate who could deliver the rate cuts President Trump desires without triggering a market panic. A political appointee slashing rates would be seen as capitulating to White House pressure; Waller doing so would be viewed as sound monetary policy.

"Waller is emerging as perhaps the only candidate who can cut interest rates with broad-based credibility. Markets trust his judgment in a way they simply wouldn't trust a purely political nominee."

— Analysis from Fortune/Yale CEO Summit coverage

The Interview That Changed Everything

Waller's candidacy received a major boost on December 19 when he met with President Trump in the Oval Office for what sources described as a "strong interview." Trump himself praised Waller afterward, telling reporters, "I think he's great. He's been a man who has been there a long time, somebody that I was very involved with."

That's a reference to 2019, when Trump interviewed Waller and ultimately nominated him to the Fed board. The fact that Trump has a prior relationship with Waller—and that the two apparently connected well during the recent meeting—has elevated the governor's odds.

On the prediction market Polymarket, Waller's implied probability of being nominated has climbed to 15%, still well behind Hassett (52%) and Warsh (29%) but no longer a long shot.

The Case Against Waller

Despite CEO enthusiasm, Waller faces significant obstacles:

Not "Trumpy" Enough: Some advisers close to the president reportedly prefer a Fed chair who will be more explicitly aligned with the administration's economic agenda. Waller's commitment to data-driven policy might be seen as insufficient loyalty.

Already on the Board: Waller is already a Fed governor with a term running through January 2030. Some in Trump's orbit prefer bringing in fresh blood rather than elevating an incumbent.

Academic Background: With a PhD in economics and decades in academia before joining the Fed system, Waller fits the profile of a traditional central banker—which may not appeal to an administration that prides itself on disrupting establishment norms.

What a Waller Fed Would Look Like

If Waller were ultimately selected, markets would likely view the choice positively. His policy views are well-documented and generally seen as pragmatic rather than ideological:

  • On Inflation: Waller has emphasized that getting inflation back to 2% remains the Fed's primary mandate, but has been willing to acknowledge when data suggests policy is working
  • On Employment: He's expressed concern about labor market softening and appears open to cutting rates faster if unemployment rises meaningfully
  • On Fed Independence: Waller has been careful not to comment publicly on political matters, but his academic writings emphasize the importance of central bank credibility

The Timeline Ahead

Powell's term as Fed Chair expires in May 2026, giving Trump several months to make a decision. The process typically involves:

  • Additional interviews with finalists (likely in January)
  • Vetting by the White House counsel's office
  • Senate confirmation hearings (typically lasting several weeks)
  • A full Senate vote

Given that timeline, an announcement in late January or February would allow sufficient time for confirmation before Powell's departure.

Why This Matters for Your Money

The Fed chair wields enormous influence over interest rates, inflation, and employment—factors that directly impact everything from mortgage costs to job prospects to investment returns.

A Waller nomination would likely be greeted with relief by bond markets, potentially easing yields and mortgage rates. A more politically-aligned choice might initially boost stocks on hopes of aggressive rate cuts, but could eventually trigger inflation concerns that push borrowing costs higher.

For now, Waller remains the dark horse. But in a race where CEO sentiment and Trump's personal rapport both matter, the 65-year-old economist has suddenly become a candidate to watch.