Trump to Announce Next Fed Chair Next Week...Pressures for Another U.S. Rate Cut

In Betting Markets, Rieder and Warsh in a Tight Race

Donald Trump, President of the United States, is presiding over a cabinet meeting at the White House on the 29th (local time). Photo by Reuters Yonhap News

President Donald Trump of the United States announced that he will "make an announcement next week" regarding the successor to Jerome Powell, Chair of the Federal Reserve (Fed), whose term ends in May. Currently, Rick Rieder, Chief Investment Officer (CIO) of Global Fixed Income at BlackRock, and Kevin Warsh, former Fed Governor, are locked in a close race.

At a cabinet meeting held at the White House on the 29th (local time), President Trump mentioned that the timing of the announcement for the next chair would be "at some point next week," adding, "In my view, the new candidate will be someone who will do a good job." He criticized the Fed's benchmark interest rate as being "unacceptably high," emphasizing, "We should have the lowest interest rates anywhere in the world."

Previously, President Trump had criticized Chair Powell via the social networking service Truth Social, after the Fed held its first Federal Open Market Committee (FOMC) meeting of the year the previous day and decided to keep the benchmark interest rate at 3.50-3.75%. Trump stated that this was causing the United States to pay "hundreds of billions of dollars annually in completely unnecessary and inappropriate interest costs."

With Chair Powell's term set to end in May this year, President Trump has narrowed down the pool of candidates for the next chair to about four people since the end of last year and has interviewed them personally. As President Trump hinted at the World Economic Forum (WEF, Davos Forum) in Switzerland earlier this month that the candidate list had been narrowed to one, the market has interpreted this as a sign that the announcement is imminent.

Scott Bessent, U.S. Secretary of the Treasury, who has been deeply involved in the selection of the next Fed chair, said in an interview with CNBC the previous day that the list of leading candidates remains at four. In addition to Rieder, CIO, and former Governor Warsh, current Fed Governor Christopher Waller and Kevin Hassett, Chairman of the White House National Economic Council (NEC), are also considered strong contenders.

According to prediction markets, Rieder, CIO, and former Governor Warsh are in a close contest for the top spot. As of 6 a.m. KST on this day, the online betting site Kalshi showed Rieder's probability of being nominated at 38%, just a 5 percentage point difference from Warsh's 33%. Waller is currently at 15%. Rieder's probability of nomination once soared above 50%, but he remains in a tight race with Warsh. Hassett, who was once considered the top candidate, has dropped in the rankings after President Trump expressed his desire to keep him in his current position.

President Trump has repeatedly emphasized that loyalty is a key factor in selecting the next chair. In a recent speech at the Davos Forum, he commented on the Fed chair candidates, saying, "They say everything I want to hear, but once they get the job, they say, 'Let's raise rates a little.' It's amazing how people change once they get the position."