Next Fed Chair Shortlist of Five Revealed as Wall Street Outsider Gains Unexpected Traction

TradingKey - After weeks of evaluation, U.S. Treasury Secretary Scott Bessent has narrowed down the initial list of 11 candidates for the next Federal Reserve Chair — the successor to Jerome Powell — to a final group of five. While no clear frontrunner has emerged, one candidate stands out: a seasoned Wall Street veteran with deep capital markets experience but no prior Fed background, who reportedly left a strong impression during interviews.

According to CNBC, citing Treasury Department officials, Bessent has now shortlisted five individuals from the original pool of 11. The list is not only for the top job at the Fed but may also include a candidate to replace Stephen Miran, the current interim Fed governor, in January 2026.

The final five candidates are:

• Michelle Bowman — Fed Governor and Vice Chair for Supervision
• Christopher Waller — Fed Governor
• Kevin Hassett — Director of the National Economic Council
• Kevin Warsh — Former Fed Governor
• Rick Rieder — Chief Investment Officer of Fixed Income at BlackRock

The Treasury Department, which is leading the selection process, will conduct a second round of interviews over the coming weeks and months. These sessions will be led by Bessent, joined by two senior Treasury officials and two senior White House aides.

Sources say that once the list is narrowed to three or four candidates, President Donald Trump is expected to take a direct role in the final decision.

Trump’s Pressure Shifts Strategy

For months, Trump has publicly pressured Powell to cut rates faster and deeper, even threatening to fire him — a move widely viewed as legally dubious. Now, with Powell’s term ending in early 2026, Trump appears to have abandoned the firing idea and instead pushed Bessent to find a successor more open to aggressive easing.

Officials close to the search revealed Bessent’s selection criteria for the first time:

• Openness to new ideas on Fed structure, policy, and mission
• Proven expertise in economics, monetary policy, banking regulation, and institutional management

Bessent recently published an article sharply criticizing the Fed as bloated and outdated, calling for a comprehensive review of its mandate, operations, and scale — signaling a desire for transformative leadership.

The Known Contenders

• Waller and Bowman: Both cast dissenting votes at the July FOMC meeting, advocating for rate cuts — a stance aligned with Trump’s demands.
• Hassett: A loyal architect of Trump’s economic agenda, seen as a reliable political ally.
• Warsh: A vocal advocate for overhauling the Fed, including reducing its regulatory footprint and restoring central bank independence.

The Outsider: Rick Rieder

Despite his lack of formal central banking experience, Rick Rieder — who oversees one of the world’s largest fixed-income portfolios at BlackRock — has reportedly made a strong impression on Treasury evaluators.

Unlike the other four, Rieder has never worked at the Fed, a fact that could work in his favor. With over three decades on Wall Street, he brings deep insight into financial markets, credit cycles, and global capital flows — areas increasingly critical in modern monetary policy.

Insiders familiar with Bessent’s thinking said he is particularly impressed by:

• Rieder’s long-standing market experience
• His ability to analyze both micro and macroeconomic forces
• His use of forward-looking frameworks, rather than relying solely on backward-looking data

One official said that Rieder would bring a calm demeanor and in-depth knowledge of financial firms outside the banking system if he becomes Fed chair.

Rieder himself has said that whoever ends up being the Fed chair, there’s so many innovative things.