Fed Governor Waller becomes Trump team's favorite successor to Powell
2025-08-07 23:54:48
On August 7, 2025, news broke that Federal Reserve Board Governor Christopher Waller was emerging as the most popular candidate among US President Trump's team to succeed current Federal Reserve Chairman Jay Powell. Powell's term as chairman ends in May 2026, and Trump's team has accelerated its search for his successor. Waller is highly favored for his policy stances and deep understanding of the Federal Reserve system.
Waller's Background and Policy Positions
Christopher Waller was nominated by President Trump and confirmed by the Senate in 2020 to serve as a member of the Federal Reserve Board of Governors, a position he holds until January 2030. He has a strong background in monetary theory, political economy, and macroeconomic theory. He previously served as Director of Research and Executive Vice President of the Federal Reserve Bank of St. Louis, where he helped establish the Federal Reserve Economic Data (FRED) as an internationally renowned resource. Waller has also taught at the University of Notre Dame, the University of Kentucky, and Indiana University, and holds a PhD in Economics from Washington State University.
Waller's policy stance has demonstrated flexibility in varying economic environments. In 2019, he was considered a monetary policy dove, supporting low interest rates to stimulate economic growth, a stance aligned with then-St. Louis Fed President James Bullard. When inflation accelerated in 2021, he spearheaded the tapering of asset purchases and, in 2022, supported significant interest rate hikes to curb inflation. In 2024, as inflation receded, he shifted his focus to supporting rate cuts, emphasizing that monetary policy should be closer to neutrality rather than restrictive.
At the July 2025 Federal Open Market Committee (FOMC) meeting, Waller advocated for a 25 basis point rate cut due to concerns about a deteriorating labor market, but he dissented from the majority decision to maintain interest rates. This marked the first time since 1993 that two governors (Waller and Michelle Bowman) dissented, highlighting the intense debate within the Fed over policy. Waller argued that the Trump administration's new tariffs would only result in a one-time price increase, that inflation expectations remained stable, and that the central bank should act "through" short-term inflation fluctuations.
It is worth noting that Waller was previously one of Powell's competitors in the 2017 Federal Reserve Chairman selection, although Powell was ultimately nominated by Trump and confirmed by the Senate.
Why the Trump team favors Waller
According to a Bloomberg report on August 7, Trump's advisers were impressed by Waller's approach to policymaking based on forecasts rather than lagging data, believing it demonstrated foresight and flexibility. Furthermore, Waller's comprehensive understanding of the Federal Reserve system, including experience in monetary policy, payment systems, and bank supervision, made him an ideal candidate. He has held discussions with the Trump team about the chairmanship but has yet to meet directly with Trump.
Waller's independence is also key to his appeal. He has publicly opposed White House interference in interest rate decisions and emphasized the importance of central bank independence. This stance may alleviate market concerns about political pressure from Trump. In a September 2024 interview with Bloomberg, Waller stated that Trump has the right to express his opinions, but that this will not affect Fed policy.
The buzz on the X platform reflects the enthusiasm for Waller's candidacy. One user noted that Waller is favored for his forecast-oriented policy approach and deep knowledge of the Federal Reserve. Another emphasized that the main difference between Waller and Powell is his preference for forward-looking decision-making rather than relying on lagging data.
Market and expert reactions
Market reaction to Waller's potential appointment as Fed Chair has been relatively muted. Bloomberg noted that Waller's nomination could be seen as a signal of policy continuity, as his support for gradual rate cuts aligns with the Fed's current cautious stance. The Financial Times previously reported that if Trump nominates a "shadow chair" early, it could cause dollar volatility as the market interprets the differing policy signals from Powell and his potential successor.
Other candidates and competition dynamics The Trump team's candidate list has been narrowed from the original "three or four" to three, including Waller, former Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett.
Warsh, a former Federal Reserve governor from 2006 to 2011 and Ben Bernanke's Wall Street liaison during the 2008 financial crisis, has extensive central bank experience. He interviewed for the Fed Chair position in 2017 but lost to Powell. Hassett, a longtime economic adviser to Trump, served as Chairman of the White House Council of Economic Advisers during his first term and is currently responsible for formulating Trump's tariff and domestic policies.
Treasury Secretary Scott Bessent was previously considered a leading candidate, but Trump revealed on his show on August 5th that Bessent has chosen to remain at the Treasury Department and not to run for Fed Chair. Another Fed governor, Michelle Bowman, has also been mentioned, but her likelihood is lower because she was only recently nominated as Vice Chairman of Supervision and is less well-known than Waller and Warsh.
White House spokesman Kush Desai stated on August 7 that Trump will nominate the "most capable and experienced" candidate, but did not confirm a specific candidate, emphasizing that any personnel discussions are speculation unless Trump personally announces them. Furthermore, the White House is interviewing candidates to fill the seat vacant by Governor Adriana Kugler, who will leave on August 8, further providing Trump with an opportunity to shape the Federal Reserve.
Waller's Background and Policy Positions
Christopher Waller was nominated by President Trump and confirmed by the Senate in 2020 to serve as a member of the Federal Reserve Board of Governors, a position he holds until January 2030. He has a strong background in monetary theory, political economy, and macroeconomic theory. He previously served as Director of Research and Executive Vice President of the Federal Reserve Bank of St. Louis, where he helped establish the Federal Reserve Economic Data (FRED) as an internationally renowned resource. Waller has also taught at the University of Notre Dame, the University of Kentucky, and Indiana University, and holds a PhD in Economics from Washington State University.
Waller's policy stance has demonstrated flexibility in varying economic environments. In 2019, he was considered a monetary policy dove, supporting low interest rates to stimulate economic growth, a stance aligned with then-St. Louis Fed President James Bullard. When inflation accelerated in 2021, he spearheaded the tapering of asset purchases and, in 2022, supported significant interest rate hikes to curb inflation. In 2024, as inflation receded, he shifted his focus to supporting rate cuts, emphasizing that monetary policy should be closer to neutrality rather than restrictive.
At the July 2025 Federal Open Market Committee (FOMC) meeting, Waller advocated for a 25 basis point rate cut due to concerns about a deteriorating labor market, but he dissented from the majority decision to maintain interest rates. This marked the first time since 1993 that two governors (Waller and Michelle Bowman) dissented, highlighting the intense debate within the Fed over policy. Waller argued that the Trump administration's new tariffs would only result in a one-time price increase, that inflation expectations remained stable, and that the central bank should act "through" short-term inflation fluctuations.
It is worth noting that Waller was previously one of Powell's competitors in the 2017 Federal Reserve Chairman selection, although Powell was ultimately nominated by Trump and confirmed by the Senate.
Why the Trump team favors Waller
According to a Bloomberg report on August 7, Trump's advisers were impressed by Waller's approach to policymaking based on forecasts rather than lagging data, believing it demonstrated foresight and flexibility. Furthermore, Waller's comprehensive understanding of the Federal Reserve system, including experience in monetary policy, payment systems, and bank supervision, made him an ideal candidate. He has held discussions with the Trump team about the chairmanship but has yet to meet directly with Trump.
Waller's independence is also key to his appeal. He has publicly opposed White House interference in interest rate decisions and emphasized the importance of central bank independence. This stance may alleviate market concerns about political pressure from Trump. In a September 2024 interview with Bloomberg, Waller stated that Trump has the right to express his opinions, but that this will not affect Fed policy.
The buzz on the X platform reflects the enthusiasm for Waller's candidacy. One user noted that Waller is favored for his forecast-oriented policy approach and deep knowledge of the Federal Reserve. Another emphasized that the main difference between Waller and Powell is his preference for forward-looking decision-making rather than relying on lagging data.
Market and expert reactions
Market reaction to Waller's potential appointment as Fed Chair has been relatively muted. Bloomberg noted that Waller's nomination could be seen as a signal of policy continuity, as his support for gradual rate cuts aligns with the Fed's current cautious stance. The Financial Times previously reported that if Trump nominates a "shadow chair" early, it could cause dollar volatility as the market interprets the differing policy signals from Powell and his potential successor.
Other candidates and competition dynamics The Trump team's candidate list has been narrowed from the original "three or four" to three, including Waller, former Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett.
Warsh, a former Federal Reserve governor from 2006 to 2011 and Ben Bernanke's Wall Street liaison during the 2008 financial crisis, has extensive central bank experience. He interviewed for the Fed Chair position in 2017 but lost to Powell. Hassett, a longtime economic adviser to Trump, served as Chairman of the White House Council of Economic Advisers during his first term and is currently responsible for formulating Trump's tariff and domestic policies.
Treasury Secretary Scott Bessent was previously considered a leading candidate, but Trump revealed on his show on August 5th that Bessent has chosen to remain at the Treasury Department and not to run for Fed Chair. Another Fed governor, Michelle Bowman, has also been mentioned, but her likelihood is lower because she was only recently nominated as Vice Chairman of Supervision and is less well-known than Waller and Warsh.
White House spokesman Kush Desai stated on August 7 that Trump will nominate the "most capable and experienced" candidate, but did not confirm a specific candidate, emphasizing that any personnel discussions are speculation unless Trump personally announces them. Furthermore, the White House is interviewing candidates to fill the seat vacant by Governor Adriana Kugler, who will leave on August 8, further providing Trump with an opportunity to shape the Federal Reserve.
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