The Four Candidates Vying to Replace Jerome Powell as Fed Chair

The highest-stakes personnel decision of 2026 is taking shape in Washington, where President Donald Trump is preparing to name a successor to Federal Reserve Chair Jerome Powell. With Powell's term as chair expiring on May 15, 2026, Treasury Secretary Scott Bessent has confirmed that four candidates remain on the president's short list.

The decision will shape monetary policy for years to come and comes amid unprecedented political pressure on the central bank, including a Department of Justice criminal investigation that has thrust Fed independence into the spotlight.

The Front-Runner: Kevin Hassett

According to multiple reports, Kevin Hassett has emerged as the leading contender for the position. Currently serving as director of the National Economic Council, Hassett is a familiar face in Trump administration circles, having previously served as chairman of the Council of Economic Advisors during Trump's first term.

Hassett, an economist who spent years at the American Enterprise Institute before joining the administration, is known for his supply-side economic views and has been a vocal advocate for the tax policies that formed the backbone of Trump's economic agenda.

His selection would signal the administration's desire to install a chair more aligned with its economic philosophy, though critics worry his close ties to the White House could compromise the Fed's traditional independence.

The Insider: Christopher Waller

Fed Governor Christopher Waller represents the institutional continuity option. A sitting member of the Federal Reserve Board since 2020, Waller has deep expertise in monetary economics and has been involved in the Fed's recent policy decisions.

Waller's academic background—he previously served as research director at the Federal Reserve Bank of St. Louis—gives him credibility among economists and market participants. His selection would likely be viewed as a more conventional choice that maintains the Fed's technocratic tradition.

The Deregulator: Michelle Bowman

Fed Vice Chair Michelle Bowman has carved out a distinct profile as a firm advocate for reducing banking regulation. Her candidacy would appeal to those in the administration who view the current regulatory framework as overly burdensome for financial institutions.

Bowman's background includes experience in community banking, giving her a perspective that differs from chairs who have typically come from larger institutions or academic backgrounds. She has been particularly vocal about the need to tailor regulations to the size and complexity of financial institutions.

The Veteran: Kevin Warsh

Kevin Warsh brings a unique combination of Federal Reserve and Wall Street experience. A former Fed governor who served during the 2008 financial crisis, Warsh has been a prominent voice in monetary policy debates since leaving the central bank.

His tenure at the Fed included the crucial period when the central bank deployed emergency lending facilities and unconventional monetary policies to stabilize the financial system. That crisis-tested experience could prove valuable if the economy faces unexpected challenges.

Powell's Uncertain Exit

Jerome Powell has remained characteristically tight-lipped about his plans after his chairmanship ends. While his term as a member of the Board of Governors extends until January 31, 2028, most observers expect him to depart when his chair term concludes in May.

Powell has declined to say whether he would remain at the Fed in a diminished role, leading to speculation that he will return to the private sector. His departure would end a tenure marked by the COVID-19 pandemic response, the subsequent inflation surge, and the aggressive rate-hiking campaign that followed.

The Political Context

The selection comes at a fraught moment for Fed independence. On January 11, Powell revealed that the Department of Justice had served the Federal Reserve with grand jury subpoenas related to his congressional testimony, escalating the administration's confrontation with the central bank.

Senator Thom Tillis (R-N.C.) has announced he will oppose any Federal Reserve nomination until the legal matter is resolved, potentially complicating the confirmation process for Powell's successor.

Market Implications

Markets have begun to price in the uncertainty surrounding the Fed transition. Deutsche Bank analysts note that while rate cuts remain the most likely path forward, "we also see a risk scenario where the next chair eventually faces a committee that could look to raise rates" if inflation proves stubborn.

The selection announcement is expected by the end of January, giving the Senate time to conduct confirmation hearings before Powell's term expires. For investors, the choice will provide crucial signals about the direction of monetary policy in Trump's second term—and whether the era of Fed independence that has characterized American central banking for decades will continue.