Original Title: "Ridley—Two Weeks Ago 'Nobody Cared,' Now the 'Most Likely to Be Nominated' New Federal Reserve Chair Candidate"
Original Author: Zhao Ying, Wall Street Insights
Two weeks ago, BlackRock executive Rick Rieder was seen as an outsider, but he is now emerging as the most likely candidate to succeed current Chair Powell in the market's predictions. Rieder is becoming a "Goldilocks" candidate in Trump's eyes due to his advocacy for interest rate cuts and his focus on the real-world impact of monetary policy—he supports lowering rates but is not widely viewed as a threat to the Federal Reserve's independence.
According to Bloomberg on Tuesday, Trump said earlier this month after interviewing Rieder that he was "very impressive."Rieder, like Trump, clearly stated that interest rates should be lower. His focus on the real impact of monetary policy, particularly in areas such as the housing market, aligns closely with the Trump administration's emphasis on affordability.
According to Polymarket data, as of Monday afternoon, Rieder had a 43.5% chance of receiving the nomination, leading over former Federal Reserve governor Kevin Warsh at 29%, current Fed governor Christopher Waller at 9.2%, and National Economic Council director Kevin Hassett at 7.2%. Trump has repeatedly hinted at his desire to keep Hassett in his current White House role, which may have narrowed the field of candidates.
Powell's term as Federal Reserve Chair will end in mid-May. White House spokesperson Kush Desai stated that any reports regarding the Federal Reserve chair nomination process before Trump formally announces it are "meaningless speculation." The nominee must be confirmed by the Senate.
Policy proposition: Emphasize productivity transformation and question lagging data.
Rieder's core argument is that the Federal Reserve relies too heavily on inflation data reflecting past conditions and pays insufficient attention to changes in the economy.He believes that productivity gains from artificial intelligence, automation, and logistics are reshaping the economy and labor market, but traditional indicators are too slow to capture these changes. In his view, there is a long lag between policy decisions and their impact on the economy.
BNP Paribas analysts noted that Rieder agrees with the Federal Reserve's 2% annual inflation target and its communication approach, but holds an economic outlook that diverges from the consensus. He places greater emphasis than current Fed officials on the magnitude and sustainability of productivity gains, and on how these factors affect growth, inflation, and the labor market.
Darius Dale, founder of independent research firm 42 Macro, said that inflation data often peaks in the later stages of the business cycle, and policy decisions based on such data arrive too late. Dale believes Rieder understands the scale of the ongoing productivity transformation, as well as the pressures high interest rates are placing on housing and labor mobility. "The committee will reflect the chair's personality traits," Dale said, "At times of structural change, you need someone who understands the direction of the market and the economy..
Housing market becomes a policy focus
Housing issues are at the core of Rieder's public statements. Mortgage interest rates remain high, and housing activity has sharply slowed since the Federal Reserve began raising rates in 2022, leading to worsened affordability, although there has been some improvement in recent months.Rieder stated that high interest rates reduce housing turnover, limit labor mobility, and slow down construction activity. These dynamics affect both employment and prices.
Trump has made lowering mortgage interest rates a priority, and Rieder's emphasis on housing perfectly aligns with this agenda. This position is clearly appealing to the White House.
Rieder also frequently discusses inequality and the distributional effects of monetary policy. In an interview with the Wall Street Journal in 2024, he stated that high interest rates have the greatest impact on borrowers, renters, and young families, while benefiting savers. He noted that high borrowing costs have harmful effects on low-income consumers, yet they do not yield significant benefits in terms of curbing inflation.
Some Democrats have long believed that Federal Reserve interest rate hikes hit low-income families the hardest. Rieder's comments echo this concern while still operating within the Fed's existing framework.
The path from Wall Street to Washington
Rieder joined BlackRock in 2009 during a period of turmoil in the credit markets. At that time, BlackRock acquired his $1.5 billion hedge fund, R3 Capital Management, which he had founded. Before that, Rieder was a prominent executive at Lehman Brothers, which sold its stake in R3 Capital before collapsing during the 2008-09 financial crisis. BlackRock's acquisition of the fund was aimed at expanding its fixed-income investment portfolio management team.
This transaction has paid off. Nearly 20 years later, the asset size has grown significantly. Blackstone's CEO, Larry Fink, noted during this month's earnings call that the actively managed fixed-income funds led by Rieder led all actively managed traded fund inflows in 2025.
Several BlackRock executives have moved back and forth between Wall Street and Washington. Former President Biden appointed Wally Adeyemo, who previously served as Larry Fink's chief of staff, as Deputy Secretary of the Treasury. Brian Deese, formerly BlackRock's head of sustainable investing, became the director of Biden's National Economic Council, while Mike Pyle, a former chief investment strategist at BlackRock, returned to the firm after advising former Vice President Harris.
Rieder's nomination would extend this pattern to the Republican administration. It would also raise the usual concerns about conflicts of interest. Rieder's career has relied on making bets related to interest rates and macroeconomic forces, which are partially driven by central banks. Officials in the Trump administration who previously accumulated wealth in the financial sector, such as Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, have also faced similar scrutiny.
Rieder is no stranger to the Federal Reserve. He previously served on the Federal Reserve's Financial Markets Advisory Committee, which provides policymakers with an external perspective.
There are still questions regarding the room for policy shifts.
Although Rieder's views have drawn attention, the Federal Reserve's policies remain deeply influenced by the surge in inflation during the pandemic. Policymakers have consistently emphasized the risks of relaxing policies too soon.Analysts from BNP Paribas warned that entrenched views on inflation within the Federal Reserve may limit the scope for policy pivots under any chair's leadership.
Warsh remains a strong contender, but his advocacy for internal reforms at the Federal Reserve has raised concerns among some current and former officials. He sometimes downplays the importance of how markets react to policy decisions. In contrast, Rieder's views may align more closely with Trump's expectations.
Rieder's rapid rise also reflects growing interest in how monetary policy intertwines with housing, labor, and productivity at a time when interest rates remain high and economic signals become increasingly difficult to interpret. This has quickly moved him from the periphery to the center of the conversation, and could potentially place him in Powell's position by May.
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