Fighting over the Fed Chair candidate intensifies: Trump advocates for rate cuts, Waller enters the shortlist

The competition for the next Federal Reserve Chair is heating up. According to The Wall Street Journal, President Trump plans to interview Federal Reserve Board Governor Christopher Waller in the near future to assess his suitability to succeed current Chair Powell. This move indicates that Trump is accelerating the deployment of Federal Reserve personnel aligned with his “aggressive rate cut” policy stance.

Currently, Waller has officially entered the list of candidates for Fed Chair. Previously, Trump had meetings with former Fed Board Member Kevin Warsh and Kevin Hassett, the former chairman of the Council of Economic Advisers, both of whom he publicly identified as top contenders. Sources familiar with the matter reveal that Trump is focusing on candidates’ attitudes toward monetary policy, especially the pace and magnitude of rate cuts, during the interviews.

Waller has recently adopted a relatively dovish stance on monetary policy. This year, the Fed has cut interest rates by a total of 0.25 percentage points over three meetings. In the previous meeting, where the decision was to hold rates steady, Waller was the only board member to oppose the decision and advocate for further rate cuts. This position makes him stand out within the “rate cut camp.”

Beyond interest rate policy, Waller’s attitude toward digital currencies and financial innovation has also attracted market attention. He has publicly affirmed the potential value of stablecoins and decentralized finance (DeFi) multiple times. At a Fed payments system meeting last October, Waller stated that the Fed should reduce over-skepticism toward DeFi and view stablecoins as a new form of currency that can coexist with traditional payment systems. Some market participants interpret this view as a signal of relative friendliness toward crypto finance.

Nevertheless, analysts believe that the probability of Waller becoming the final candidate remains limited. He is the only one among the three candidates with no private connections to Trump. Additionally, some advisors close to the president are dissatisfied with Waller’s previous recommendation of a one-time rate cut of 0.5 percentage points, considering his stance not aggressive enough.

Trump’s requirements for the next Fed Chair are quite clear. He has repeatedly criticized the current Chair Powell for not cutting rates enough, despite the benchmark rate already being in the 3.50%—3.75% range. Trump believes that interest rates should be quickly lowered to around 1% or even lower.

Treasury Secretary Steven Mnuchin stated that the president is systematically evaluating candidates’ views on the Fed’s policy framework and institutional structure, with a final decision possibly to be made around January next year. Currently, Kevin Warsh, who has close ties to Trump, is still considered the most likely successor.