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lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
Trump made his MAGA Fed pick. His next choice will be far more
consequential
By Bryan Mena, CNN
Updated:
5:00 AM EDT, Sat August 9, 2025
Source: CNN
President Donald Trump recently nominated one of his economic advisers
to the Federal Reserve’s top ranks, but his next choice will be far
more consequential. Plans for picking the next Fed chair are already
taking shape.
Trump on Thursday to temporarily fill a vacant seat on the Fed’s
Board of Governors, though he still needs to be confirmed by the
Senate.
Meanwhile, the Trump administration has also been interviewing
candidates for an even more powerful role: Fed chair. The current
chair, Jerome Powell, has long drawn Trump’s ire for his refusal to
acquiesce to the president’s demands to lower interest rates — and
his term expires in May.
Just this past week, Trump’s search for who will steer the world’s
most powerful central bank next year took various twists and turns. It
shows Trump is leaving no stone unturned, especially considering he has
repeatedly said he’s regretful of his nomination of Powell.
Trump said he is for the job. Meanwhile, Christopher Waller, a current
Fed governor, unexpectedly gained ground with the president’s inner
circle, according to people familiar with the matter. And two
Republicans named Kevin — former Fed governor Kevin Warsh and White
House economist Kevin Hassett — remain on Trump’s shortlist. It’s
also possible that Miran, if he’s confirmed, ends up impressing the
president so much that he is elevated to lead the Fed.
The on Friday reported that Trump expanded his list of potential picks
for Fed chair, now including former St. Louis Fed president James
Bullard.
“It’ll be interesting to see how this all plays out because the two
Kevins are certainly quite viable, but Waller might be the one that the
market forces as a choice,” said Derek Tang, an economist at research
and consulting firm LH Meyer/Monetary Policy Analytics.
Brownie points for Waller
Waller was appointed to the Fed’s board by Trump in 2020, and until
recently, he had built a reputation for being a key messenger on the
Fed’s policy moves.
After the Fed hiked interest rates aggressively to tame inflation in
2022 and 2023, investors listened closely to Waller’s speeches for
clues on when central bankers might finally begin lowering rates
instead. Fed officials have a tradition of giving Wall Street a
heads-up on what they plan to do with rates through their public
engagements, known as “forward guidance.”
In recent months, Waller has chosen to set himself apart from the rest
of the Fed’s rate-setting committee of 12 voting members.
Last month, Waller was one of two Fed governors who dissented on the
Fed’s latest decision to , instead backing a rate cut. That was the
first time since 1993 that more than one Fed governor dissented on a
policy move.
In explaining his dissent, Waller said that “tariffs are one-off
increases in the price level and do not cause inflation beyond a
temporary increase” and that the Fed should step in with a rate cut
to prevent the labor market from falling off a cliff.
When pitching Waller to the president, Trump’s advisers repeatedly
referenced Waller’s dissent, according to people familiar with the
matter. The dissent undoubtedly boosted Waller’s chances for Fed
chair, the sources said.
The battle of the Kevins
When Trump was threatening to sack Powell in the spring, Kevin Warsh as
a potential replacement. National Economic Council Director Kevin
Hassett eventually joined him on the list of potential Fed chairs.
Warsh, a longtime Trump ally, has said the president’s expansive
tariffs won’t stoke inflation — a stance that’s at odds with the
general consensus among economists. During a speech in Stanford,
California, in May, Warsh said the Fed would be to blame if it can’t
combat the persistent impacts of tariff-induced inflation.
“The president clearly trusts Kevin Warsh and thinks highly of him,
and as I understand it, his in-laws are close with the Trump family, so
there’s a personal connection there,” said Brian Gardner, chief
Washington policy strategist at investment firm Stifel. (Warsh is
married to billionaire Jane Lauder, granddaughter of Estée Lauder, the
late cosmetics industry mogul.)
Warsh was previously under consideration for Fed chair during Trump’s
first term, but Powell was ultimately chosen on advice from
then-Treasury Secretary Steven Mnuchin.
But before Waller’s dissent drove up his stock with Trump, Hassett
was seen as a front-runner for Fed chair.
Hassett, a PhD economist with a long track record of supporting
Republican politicians, has been a key supporter of Trump’s sweeping
economic agenda.
For example, Hassett — like Warsh — has vehemently defended
Trump’s tariffs. In early April, when Trump massive tariffs hikes,
Hassett ABC News: “I don’t think that you’re going to see a big
effect on the consumer in the US,” because countries will be
negotiating trade deals with the administration.
“People assume Hassett is eventually going to be nominated because
he’s at the White House and he definitely scores very highly on
loyalty, having been with Trump since his first administration,” Tang
said. “Trump probably feels like he can trust him.”
Both Warsh and Hassett have said the Fed should remain independent.
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