US President Donald Trump to Name New Federal Reserve Chair on Friday Amid Rate Policy Tensions

US President Donald Trump says a new Federal Reserve chair to replace Jerome Powell will be named on Friday morning, sharpening focus on the central bank’s direction on interest rates. The announcement is set to follow a tense policy backdrop, with Trump pushing for higher rates while the Federal Reserve has just held borrowing costs unchanged after three straight cuts.

Trump confirmed the timing during an event at the Kennedy Center on Thursday, local time, according to Reuters. "I'll be announcing the Fed chair tomorrow morning," Trump said, signalling an imminent decision that could shape US monetary policy and global financial markets, including India, for years ahead.

Federal Reserve chair decision and interest rate backdrop

The president’s comment came one day after the Federal Reserve decided to keep its benchmark rate steady. That move followed three consecutive reductions earlier, which aimed to support economic activity. Trump has repeatedly argued that rates should now move higher, putting public pressure on the central bank’s policymakers and sharpening debate over the Fed’s next steps.

Fed governor Christopher Waller, a Trump nominee in 2020 and now on the shortlist for the Federal Reserve chair role, opposed the latest decision alongside one other official. Waller has recently argued that the Federal Reserve still has space to reduce rates further, a view that fits Trump’s long-running calls for looser policy despite the president’s recent push for hikes.

Candidates for Federal Reserve chair and frontrunners

A number of well-known economic figures are being considered for the top job at the US central bank. The list includes White House National Economic Director Kevin Hassett, former Federal Reserve governor Kevin Warsh, sitting Fed governor Christopher Waller, and BlackRock executive Rick Rieder. Whoever is selected as Federal Reserve chair will require confirmation by the US Senate before taking office.

The race appears to centre on a small group. In December last year, The Wall Street Journal reported that Trump was likely to pick either Warsh or Hassett. Speaking to the publication on 12 December, Trump said: "Yes, I think he (Warsh) is (frontrunner). He thinks you have to lower interest rates. And so does everybody else that I've talked to. I think you have Kevin and Kevin. They're both—I think the two Kevins are great. I think there are a couple of other people that are great," he said.

Federal Reserve chair contenders: profiles and policy views

Hassett, who holds a PhD in Economics, is seen as a leading name because of a long history with Trump and consistent support for lower interest rates, according to reports. Hassett served as a senior economic adviser between 2017 and 2019. During the COVID-19 pandemic, Hassett briefly returned to that advisory role in 2020 and was appointed head of the National Economic Council in January 2025.

Warsh, who sat on the Federal Reserve Board from 2006 to 2011, is another key contender for Federal Reserve chair. The BBC has noted that Warsh has frequently criticised the Fed’s focus on data models and its heavy use of assets on its balance sheet. Warsh built a reputation as "hawkish" while in office, favouring higher rates, yet is now viewed as more open to rate cuts in the short term.

Waller, by contrast, is a current insider at the central bank. While Waller stresses that the Federal Reserve can still trim rates, analysts cited by the BBC say Waller lacks the close personal ties with Trump that Hassett and Warsh enjoy. This perception may limit Waller’s chances despite policy alignment with Trump on easing at various points.

Federal Reserve chair betting odds and outsider appeal

Rick Rieder, a senior BlackRock executive with a long Wall Street career, stands out in the Federal Reserve chair contest because Rieder has never worked at the Fed. Bloomberg reports that Trump has shown interest in Rieder’s proposals to reform the institution. Prediction market Kalshi, quoted by Reuters on 27 January, assigns Rieder a 48% probability of being Trump’s choice.

Kalshi places Warsh second at 31%, with Waller and Hassett each around 8%. Rieder’s outsider status is viewed as an advantage by some traders, as it could make Rieder appear less tied to existing Federal Reserve practices. Trump’s final choice, due on Friday morning, is expected to send a clear signal about how aggressively the White House wants the central bank to act on interest rates.