#MacroWatchFedChairPick

As Jerome Powell’s term as Federal Reserve Chair approaches its end in May 2026, the question of who will succeed him has become an increasingly important macroeconomic topic. With inflation still uneven across sectors, growth indicators beginning to soften, and financial markets remaining highly sensitive to policy direction, the next Fed Chair is likely to play a decisive role in shaping market outcomes. President Trump is widely expected to announce his nominee early this year, and the range of candidates under discussion reflects very different approaches to monetary policy.
Among the names most frequently mentioned is Kevin Hassett, a White House economic adviser known for his dovish views and strong support for aggressive rate cuts to stimulate economic growth. Christopher Waller, a current Federal Reserve governor, is also seen as a leading contender. Waller is widely regarded as a data-driven and pragmatic policymaker who supports cautious rate cuts when economic conditions warrant them, while remaining prepared to act decisively if inflation pressures re-emerge. Another potential candidate is Kevin Warsh, a former Fed governor with a historically hawkish reputation, though recent economic conditions suggest he may adopt a more flexible stance if growth concerns continue to rise. Other possibilities include officials such as Michelle Bowman or James Bullard, each bringing their own balance of hawkish and dovish tendencies.
From a macroeconomic perspective, Christopher Waller appears to be the most balanced choice in the current environment. His policy record demonstrates a willingness to tighten financial conditions during periods of elevated inflation, followed by careful and measured easing as growth slows. This flexibility helps preserve the Federal Reserve’s credibility on inflation while also addressing the risk of an economic slowdown. Given the present backdrop of inflation running above target in certain sectors, a cooling labor market, and persistent market volatility, this approach offers a disciplined framework that markets tend to reward with greater stability.
Kevin Hassett represents a more growth-focused and dovish alternative. His advocacy for aggressive rate cuts could provide a short-term boost to liquidity, potentially driving equities, risk assets, and cryptocurrencies higher in the early stages. Such a policy shift could also improve consumer and investor confidence in the near term. However, this approach carries risks, particularly if inflation remains elevated. Concerns around Federal Reserve independence could unsettle bond markets, push long-term yields higher, and ultimately lead to increased volatility after an initial period of optimism.
Kevin Warsh presents a more complex and mixed outlook. His institutional credibility and emphasis on inflation control could anchor expectations if paired with selective easing. Markets may respond favorably to this predictability, especially if communication remains clear and consistent. However, if Warsh were to lean more hawkish than expected, financial markets could interpret tighter policy as a threat to growth, triggering drawdowns across equities and crypto assets until clarity is restored.
Across asset classes, the implications vary by candidate. Under Waller, U.S. equities are likely to benefit from policy stability and reduced volatility, while bond yields remain relatively predictable. Crypto markets could see supportive liquidity conditions without excessive overheating. Under Hassett, markets may experience strong short-term rallies, particularly in risk assets, but with an increased risk of sharp reversals if inflation concerns resurface. Under Warsh, outcomes would likely depend heavily on communication, with markets favoring transparency but remaining vulnerable to hawkish surprises.
Overall, Christopher Waller stands out as the most pragmatic and balanced option to navigate the current and anticipated macroeconomic landscape. His methodical approach to easing supports growth without undermining inflation credibility, avoids policy extremes that could destabilize bond markets or inflate speculative bubbles, and provides a predictable policy backdrop. In an environment defined by uncertainty and heightened sensitivity to monetary policy, this balance is likely to be the most constructive for equities, bonds, and crypto markets alike.