Ultimate two options! Trump hints that the final candidate has been locked in and warns Powell that "his days will not be good."

President Trump said on Wednesday that the selection process for the new Federal Reserve chairman, which began in September of last year and once had as many as 11 candidates, is nearing its end, and he hinted that he already has a candidate in mind. Trump said, "I want to say that the Federal Reserve chair candidate has been narrowed down to three, no, two. And I may be able to tell you, there may only be one left in my mind." He also stated that he will announce the nomination for the new Federal Reserve chairman in the "near future" and revealed that the next Federal Reserve chairman will be a male, "a highly respected person." It is widely believed that the finalists include former Federal Reserve Governor Kevin Warsh, current Governor Christopher Waller, National Economic Council director Kevin Hassett, and BlackRock's fixed income business head Rick Rieder. Trump said in an interview that the last candidate interviewed, Rieder, "impressed," but he also praised all the candidates. However, when discussing the Federal Reserve chairman selection process, Trump pointed out, "What's surprising is that once people are in office, they change their behavior. To some extent, it is a betrayal, and it is really bad, but they must do what they think is right." He stated that he and Treasury Secretary Mnuchin had "great conversations" with each of the Federal Reserve chairman candidates. Additionally, Trump once again hinted that he hopes Hassett will remain in his current position. Trump said, "Actually, I'd rather have him (Hassett) stay in his current position." This is consistent with Trump's statement last Friday, when he said that if Hassett were to leave the White House, the government would lose a "very influential advocate" on economic issues. The statements regarding the new Federal Reserve chairman are the latest developments in a series of dramatic turns for the Federal Reserve following unprecedented turmoil over the past year. Despite Trump's fierce criticism of Powell and his colleagues during his first term as president from 2017 to 2021, he significantly increased pressure in 2025. This included more verbal attacks on policy makers, threats to dismiss Powell, and an actual attempt to dismiss Governor Lisa Cook. The latter became one of the topics of a Supreme Court hearing on the President's authority over the institution. With Powell's replacement almost certain after his chairmanship ends in May of this year, the key question going forward is whether he will continue to serve the remaining two years of his term as a Governor. If he chooses to stay, Powell can still play a role in monetary policy and interest rate decisions, and potentially act as a "firewall" against Trump's attempts to control Federal Reserve decisions. Trump displayed a somewhat indifferent attitude towards Powell's decision. He said, "If (he stays), I think his life won't be very, very happy. I think he wants to leave. He hasn't done a good job." Trump once again criticized the Federal Reserve headquarters renovation project overseen by Powell, which has cost over $2.5 billion. The Justice Department has issued subpoenas for this project to Powell. Trump said, "I could have done it for $25 million, and it would have been better than what they did." Hassett "out" Rieder may emerge as dark horse It is worth noting that Trump's statement last Friday significantly reduced the probability of Hassett, who was previously the frontrunner, becoming the next Federal Reserve chairman. That day, Trump told Hassett at an event at the White House, "To be honest, if you want to know the truth, I actually want you to stay in your current position. If I move you, these Federal Reserve people, of course, including the one we have now, they don't speak out much. I would lose you. This is a serious concern for me." On Sunday last week, Hassett told the media that Trump is likely to keep him in his current role as White House economic adviser. These comments imply that he will not be considered for the position of the next Federal Reserve chairman. Hassett said at the time that there are many excellent candidates, and the President deciding that I am the best fit for the White House currently may very well be correct. After Trump publicly stated that he did not want to relocate Hassett, Krishna Guha, head of central bank strategy at Evercore ISI, noted in a report to clients that this news would "put Warsh directly in pole position to succeed Powell as Fed chairman." Trump had expressed a strong impression of Warsh in a previous interview last month, and during the holidays, he told colleagues that he was impressed by Warsh's intelligence and good looks. At the same time, the probability of Rieder being nominated as the next Federal Reserve chairman has significantly increased on prediction websites. Reports indicated that Rieder's interview with Trump last week went "quite smoothly." In fact, back in September 2025, Treasury Secretary Mnuchin interviewed Rieder, who was then considered a top candidate for the new Federal Reserve chairman. The discussion at the time focused on two core issues: the current and future direction of monetary policy, and structural reform issues related to Federal Reserve operations. Rieder currently serves as Senior Managing Director and Global Chief Investment Officer of Fixed Income at BlackRock, bringing significant experience in financial markets. In previous media interviews, he mentioned, "Whoever ultimately becomes the Federal Reserve chairman will have many innovative affairs to address." It is worth noting that unlike traditional Federal Reserve chairmen who often hold a PhD in economics, Rieder, similar to current Chairman Powell, does not have relevant academic titles. If elected, he will continue this non-traditional path to the position. Rieder's views on lowering interest rates and his "unconventional" tolerance for deficits and inflation align well with the Trump administration's preferences. On monetary policy, Rieder consistently advocates for the Federal Reserve to lower interest rates to a "neutral level" of around 3% as the economy evolves. On fiscal issues, Rieder has downplayed concerns in the market about the massive U.S. government deficits. Regarding inflation, he has proposed that if a slightly higher inflation rate helps stabilize debt dynamics and maintain employment, then such inflation is acceptable. The Justice Department's rare issuance of a subpoena to current Chairman Powell over the Federal Reserve headquarters renovation project has sparked a political feud. Powell retaliated, calling it political retaliation for his reluctance to quickly lower interest rates. This event has quickly escalated tensions, with Senate Banking Committee member Thom Tillis issuing a warning that any Federal Reserve nominee will face the most rigorous scrutiny until the investigation is resolved. This tense political environment may actually work in Rieder's favor. Unlike traditional candidates deeply embroiled in Washington policy, Rieder, as a seasoned Wall Street bond trader, is far removed from political controversies. Insiders indicate that in the Senate confirmation process, Rieder is seen as a "safe choice" who is more likely to pass through smoothly than other candidates.