What to know about Trump's finalists to replace Powell as Fed chair

President Trump faces a crucial decision regarding the next Federal Reserve chair as Jerome Powell's term nears its end. Treasury Secretary Scott Bessent confirmed five finalists for the position, with a selection expected by year's end. Kevin Hassett is considered the frontrunner due to his close relationship with President Trump, having held significant White House roles and worked for Jared Kushner's firm. While Trump values loyalty, markets might perceive a Hassett-led Fed as less independent, potentially impacting confidence during economic instability. Christopher Waller, a current Fed governor appointed by Trump, is another strong contender, known for his independent thinking and Fed insider knowledge. His enthusiasm for decentralized finance could appeal to a segment of Trump's coalition. Kevin Warsh, a former Fed governor, is a monetary hawk who has criticized the Fed's expansive policies, aligning with Treasury Secretary Bessent's views. However, his hawkish stance may conflict with Trump's desire for lower interest rates. Rick Rieder, a prominent figure at BlackRock, offers deep bond market expertise but lacks direct Fed and Washington experience. Michelle Bowman, a Fed governor and community banking specialist, presents an unconventional background and has shown a willingness to challenge Fed orthodoxy. While these five are finalists, prediction markets suggest other individuals might still be considered for the role.