President Donald Trump is expected to announce his pick for the next chair of the Federal Reserve on Friday. Reports suggest he will choose Kevin M. Warsh, a former Fed governor who has deep experience in finance. The selection of a new Fed chair has been a long and highly public process. At one point, more than 10 candidates were being considered. This included Kevin Hassett, director of the White House National Economic Council, and Christopher Waller, a current Fed governor. Rick Rieder, a top executive at BlackRock, was also a finalist.
The decision is not official until Trump makes the announcement, but he met Warsh at the White House on Thursday. After the meeting, Trump told reporters he would soon name someone “known to everybody in the financial world.”
“A lot of people think that this is somebody that could’ve been there a few years ago,” Trump said. He seemed to be referring to Warsh, who was almost chosen during Trump’s first term. Instead, Trump picked Jerome Powell, who later became a frequent target of the president because he refused to lower borrowing costs as Trump wanted.
Who is Kevin Warsh?
Kevin Warsh served as a Fed governor from 2006 to 2011 after being appointed by President George W. Bush. He has long supported lower interest rates and has also called for “regime change” at the Fed. Warsh has strong ties to Wall Street and currently works with billionaire investor Stanley Druckenmiller. Druckenmiller is close to Treasury Secretary Scott Bessent, who led the search for the next Fed chair. Trump has said he wants Hassett to remain at the White House. Hassett’s chances may have declined after the Justice Department opened a criminal investigation into Powell.
Why Trump may pick Warsh for Fed top post and not Reider
Trump recently praised Rieder in an interview at the World Economic Forum, and markets shifted. Some Wall Street analysts still think the race is close and that both Warsh and Reider are strong possibilities. Even so, Rieder shares something important with Jerome Powell. Like the current Fed chair, he does not have a PhD in economics. Instead, his background is rooted in financial markets.
Rieder worked at Lehman Brothers before it collapsed in 2008. At BlackRock, he manages $2.5 trillion in bonds and helps oversee the $14 trillion the firm manages for clients, including the federal employees’ retirement fund. During the COVID-19 crisis, BlackRock helped the Fed manage corporate bond purchases to stabilise the economy. However, Rieder has said he supports Fed independence and wants rates around 3%, which is higher than Trump desires. This makes it unclear whether he would fully follow the president’s wishes.
Trump has openly admitted that he wants a Fed chair who would act according to his preferences. He said at Davos: “They get the job, they’re locked in for six years… It’s amazing how people change once they have the job… They’ve got to do what they think is right.”
Despite his strong standing, some of Rieder’s past remarks could also work against him. During a CNN interview in March 2021, Rieder openly criticised one of Trump’s biggest first-term achievements: cutting the corporate tax rate to 21%.
Rieder has also differed from Trump on immigration. In April 2023, he spoke in favour of expanding immigration, the opposite of Trump’s current crackdown. “In most economies around the world, you need immigration,” Rieder said during a Morningstar podcast. He pointed to airlines, hotels and other businesses that “can’t operate at full capacity” because they “just can’t find enough labor.” “With an aging population and, like I say, without immigration, it’s really, really hard to fix that,” he added.
Rieder’s political donations could also raise eyebrows. Federal filings show he has given money to Democrats including House Minority Leader Hakeem Jeffries, Senator Cory Booker, and former senators Jon Tester and Sherrod Brown. He has also donated to Republicans, including Never Trump figures such as Nikki Haley, Jeb Bush and former Maryland Governor Larry Hogan.
Above all, unlike Warsh and Hassett, Rieder has never worked in government, a notable break from tradition.