The final candidate for Fed Chairman met with President Trump this week and maybe he still has a chance. The President is notoriously fickle and has a flair for the dramatic so maybe the final impression was the best one.
Fox Business reports that the Chief Investment Officer of Global Fixed Income at BlackRock had one big thing going for him:
“He’s the only person on the finalists list that has no previous Federal Reserve Experience. Two Senior Administration Officials tell me the people in the room for the interview viewed that as a big positive,” writes Fox’s Edward Lawrence.
The meeting was attended by Trump, Vance, Bessent, Chief of Staff Susie Wiles, and Deputy Chief of Staff Dan Scavino.
The report said Rieder talked about Fed profitability, the importance of monetary policy stability, and US debt dynamics.
I would suspect Bessent is pushing for Rieder as he’s undoubtedly the candidate that markets would feel most-comfortable with, alongside Waller. That said, Trump himself has repeatedly said Kevin Warsh and Kevin Hassett are his favored candidates. Both are seen as ‘yes-men’ for the President who will be more-likely to lower rates, but only if they can convince the rest of the board.
Rieder has long commentated on markets and has developed a strong reputation as a smart analyst and sober assessor of the economy. Early this year, he released a playbook for investing in 2026 and said the year is going to be about selectively investing, rather than the ‘buy anything’ market that lifts all boats.
He is worried about the labor market and said:
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Underlying slack is moving the wrong way.
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Layoffs are now about “efficiency” (cost-cutting) rather than cyclical weakness.
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Healthcare hiring has been masking weakness everywhere else. Excluding healthcare, job growth is negative.
He also forecast 2% GDP Growth largely driven by AI capex and suggested buying quality fixed income.
If he were selected, I’d expect to see the long end rally but it could still be a positive for the US dollar as it removes tail risks around the loss of independence. I would also expect to see gold slump.
Bessent has said the decision will come before the end of the month.
