US Treasury Secretary Mnuchin Reveals Final Candidates for Fed Chair

Key Takeaways:

• Final shortlist of five potential candidates to succeed Jerome Powell as Fed Chair.
• President Trump expected to make a decision before the end of the year.
• Market expectations for further interest rate cuts by the Federal Reserve.
• President Trump's continued criticism of Jerome Powell's interest rate policy.

Final Candidates Unveiled

U.S. Treasury Secretary Steven Mnuchin confirmed on Monday that President Trump will select a successor to Jerome Powell as chair of the Federal Reserve (the U.S. central bank) before the end of the year. While various names have been circulating for months, Mnuchin has now revealed the definitive list of candidates under serious consideration.

The official list includes current Federal Reserve governors Christopher Waller and Michelle Bowman, as well as former Federal Reserve governor Kevin Warsh, White House National Economic Council Director Lawrence Kudlow, and BlackRock executive Rick Rieder.

Selection Process and Interviews

Mnuchin, who is responsible for conducting the interviews, clarified that he intends to hold another round of interviews with the aforementioned candidates. He expressed his hope to present an "excellent list of candidates" to President Trump after the Thanksgiving holiday. President Trump has also confirmed that he anticipates making a decision on the appointment before the year's end.

Trump's Criticism of Powell

President Trump reiterated his criticism of Jerome Powell, calling him "not smart at all" and criticizing him for not cutting interest rates aggressively enough, which he claims is harming the economy.

Market Expectations for Rate Cuts

Markets widely anticipate that Federal Reserve policymakers will cut interest rates by 25 basis points at the conclusion of their two-day policy meeting ending on October 29th. This would be the second such action taken by the Fed this year.

Potential Pathway for New Chair

It is likely that the next Fed chair will be appointed first to a position as a Fed governor. The position is currently held by Philip N. Jefferson, and his term ends next January, allowing for a new Fed chair nominee to potentially be appointed to a full 14-year term.

Sources familiar with the matter have indicated that Rick Rieder has particularly impressed Mnuchin. Rieder has been a prominent figure on Wall Street for many years, and his analysis of fixed income markets and the Federal Reserve is widely respected. Rieder also manages a large division at BlackRock. The sources suggest that the fact that Rieder is the only one of the five candidates who has never worked at the Federal Reserve could be a positive attribute.