LIVE MARKETS-BlackRock’s Rieder jumps in Fed Chair odds, seen positive for Fed independence

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BLACKROCK’S RIEDER JUMPS IN FED CHAIR ODDS, SEEN POSITIVE FOR FED INDEPENDENCE

BlackRock's chief bond investment manager Rick Rieder has jumped to first place in prediction markets for Donald Trump's Federal Reserve Chair nomination, and analysts say his appointment could ease concerns about the central bank's independence if it occurs.

Polymarket shows Rieder with 47% odds and former Fed Governor Kevin Warsh in second place at 28%. Fed Governor Christopher Waller, Trump economic adviser Kevin Hassett and Treasury Secretary Scott Bessent trail at 9%, 7% and 3%, respectively.

Standard Chartered analyst Steve Englander sees Rieder as a strong candidate partly because "Warsh and Hassett are so well known to Trump that it would have been easy at any point over the last six months to name them." He notes Rieder's optimism on productivity and supply-side growth "means he may look through modest inflation blips."

Englander said naming Rieder, Waller or Bessent "could reduce fears on Fed independence, lower risk premia and support the USD." By contrast, Hassett is seen as most loyal to Trump, making it harder for him to appear credibly independent.

BMO Capital Markets analysts note both Warsh and Rieder "retain Fed credibility as opposed to bringing into question the bias and effectiveness of a Trump loyalist."

JPMorgan, meanwhile, says any new chair will struggle to shift policy significantly given "the dispersion of policy views across the FOMC now."

(Karen Brettell)

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