"Intentional or not, any hints Jerome Powell may drop about his outlook on the economy have the potential to move markets. While the chairman of the Federal Reserve has insisted time and again that the only factors he is focussed on is a mandate of inflation at 2% and maximum employment, he'll also be keeping Wall Street in his periphery. But before too long, the attention of analysts and investors may move elsewhere: President Trump is ready to announce his nomination."
"With Chairman Powell (himself a Trump nominee) coming to the end of his term next spring, speculation has been rife throughout 2025 as to who will replace him. The White House has been transparent about the potential names on the list: "two Kevins" (Trump's chief economic advisor Kevin Hassett and former Fed governor Kevin Warsh) as well as some names within the Fed. These have included current Federal Open Market Committee members such as governors Chris Waller and Michelle Bowman."
Jerome Powell's remarks can move markets, even though he emphasizes a 2% inflation target and maximum employment as primary goals. President Trump announced that he will soon name a nominee to replace Powell when Powell's term ends next spring. Potential contenders include Kevin Hassett, Kevin Warsh, governors Chris Waller and Michelle Bowman, and BlackRock's Rick Rieder. Treasury Secretary Scott Bessent has been lobbied but prefers to remain in his cabinet role. Prediction markets show Hassett with 79% odds, Warsh 13%, and Waller 8%. Trump's earlier threat to fire Powell raised concerns about Federal Reserve independence and market stability.
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