From Yahoo Finance: 2025-06-18 06:21:00

President Trump is set to nominate a successor to Federal Reserve Chair Jerome Powell, sparking concerns in the markets. The potential for a new chair who may clash with Powell on monetary policy could cause unease. Wall Street emphasizes the need for an independent Fed to maintain market stability.

The Fed chair, a key figure in U.S. monetary policy, is closely watched by Wall Street. A new chair must prioritize economic balance and the dual mandate of full employment and price stability. Fed independence is crucial for market functionality, and any deviation could pose significant risks.

Potential candidates for the Fed chair include Kevin Hassett, Kevin Warsh, Judy Shelton, and Scott Bessent. Christopher Waller is also considered a top contender. However, the White House and the Fed declined to comment on specific contenders. Investors speculate on who Trump will ultimately choose.

Concerns arise over the possibility of a “shadow” Fed chair providing conflicting messages on monetary policy. Trump’s criticism of Powell for not lowering interest rates has raised doubts about the future chair’s independence. The confirmation process for a new chair could take months, impacting market stability and policy decisions.

Market reactions to a new Fed chair may vary, with some investors preferring no reaction at all. The selection process could lead to uncertainties, as Trump’s choice remains unknown. Investors are cautious about the implications of an early nomination and await further developments in the selection of Powell’s successor.

Read more: Analysis-Early Fed chair nomination could rattle markets