Win rate rises to the top! New Federal Reserve Chairman candidate to be announced soon, Riedel emerges as a dark horse

BlackRock executive Rick Rieder’s odds of becoming the next Federal Reserve Chair have soared, bringing new developments to the months-long drama over the chairman selection.

On January 23, according to Bloomberg citing informed sources, BlackRock executive Rick Rieder attracted President Trump’s attention with his central bank chief-like demeanor, and a series of ideas for reforming the Fed.

The day before, Trump said he had completed interviews with the candidates and had someone in mind. Trump pointed out that both Rick Rieder and Kevin Warsh were strong contenders. U.S. Treasury Secretary Bessent said Trump could announce the decision as early as next week.

Reportedly, when Trump administration officials solicited investor opinions on the short-list of candidates, Rieder received positive feedback from participants in the bond market. At this week’s World Economic Forum in Davos, corporate executives and investors also privately expressed support for Rieder.

On the prediction website Polymarket, Rieder’s probability of being appointed Fed Chair surged from 6% to 49% this week, making him the frontrunner.

However, a concern has recently emerged in Trump’s inner circle: if Rieder takes office, will he follow the president’s intention to cut interest rates quickly, or will he take an independent stance?

Wall Street Background and Policy Positions

Reports say Rieder’s Wall Street credentials and openness to reforming the Fed have enhanced his competitiveness for the top Fed position.

As BlackRock’s Global Chief Investment Officer of Fixed Income, he manages about $2.4 trillion in bond strategies, having started his career at Lehman Brothers, and is a true market veteran.

Unlike the other three finalists, Rieder has never worked within the Federal Reserve system, and is thus seen as unfettered by traditional Fed thinking or internal relationships.

His critical views on the Fed have also caught Trump’s attention. In media interviews this week, Trump praised him as “impressive.”

Wallstreetcn reported that Rieder recently stated publicly that even after the Fed cuts rates, interest levels are “still too high to reinvigorate the housing market,” noting that small businesses and young households, who rely more on debt, are still struggling.

He believes that inflation is “yesterday’s problem” and that the Fed should focus more on the weakening labor market recently evident. Tight monetary policy may have unexpected distribution effects, such as boosting spending by wealthy asset owners while harming small businesses and younger workers.

On the balance sheet side, Rieder said the Fed should halt the reduction of its holdings to avoid turmoil in funding markets.

However, some investors view Rieder as a pragmatist rather than a theorist, and more likely to uphold the Fed’s institutional independence. An executive at a major U.S. asset management firm said:

Rieder isn’t ideological—he’s more pragmatic. He is more likely to care about his historical legacy and values the Fed’s long-term reputation and foundation as an important institution.

The market expects he will take a data-driven approach, balancing the White House’s demands with protecting central bank independence.

Selection Nears Conclusion

Currently, the contest is still among Rieder, Hassett, current Fed Governor Waller, and former Fed Governor Warsh.

On Thursday, Trump said he had finished interviewing candidates and had settled on a nominee, but did not disclose more detail. Treasury Secretary Bessent, who has led the Fed chair selection process for months, said Trump could announce the decision as early as next week.

Whoever is ultimately nominated must be confirmed by the Senate. In the Senate Banking Committee, Republicans hold only a narrow 13-11 advantage. White House spokesman Kush Desai said in a statement:

Prior to President Trump’s announcement, any reporting about the Fed chair nomination process amounts to meaningless speculation.

Trump has said that he wants a central bank chief who is enthusiastic about cutting interest rates. Hassett is one of Trump’s most senior economic advisers and has long been considered a frontrunner for the position.

Several Republican senators have publicly expressed concerns about the Fed’s independence, and privately questioned whether Hassett would be too compliant with the president’s wishes.

But Wallstreetcn reported that last week Trump indicated he might prefer to keep Hassett in the White House focused on economic policy communications. As of Saturday, Warsh’s probability of winning had fallen from 64% earlier in the week to 33%.

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