Trump Shortlists Three Candidates to Replace Fed Chair
US President Donald Trump has narrowed his list of candidates to replace Jerome Powell as Federal Reserve chair to three individuals: White House economic advisor Kevin Hassett, former Fed governor Kevin Warsh and current Fed governor Christopher Waller. Trump initially considered Treasury Secretary Scott Bessent, who declined the role. The move comes as Trump criticizes Powell for acting “too late” on interest-rate cuts and blames the Fed for high mortgage rates. Under Powell’s tenure, rates have remained steady, amid concerns that tariffs could stoke inflation and a recent weakening labor market—job growth slowed sharply in August and unemployment rose to 4.3%. Traders will watch for which candidate is chosen, as their views on rate cuts and monetary policy will directly influence market sentiment and risk assets.
Neutral
The Fed chair shortlist creates political and economic uncertainty in the near term. While Trump’s preferred candidates are likely more dovish—potentially favoring aggressive rate cuts that boost risk assets—the nomination process itself may drive volatility. Historically, markets respond positively to dovish Fed leadership, but until a candidate is confirmed, traders may adopt a cautious stance. In the long run, the appointed chair’s stance on interest rates and inflation will shape crypto’s correlation with broader market trends.