Last week, Treasury Secretary Scott Bessent said President Donald Trump could nominate the next chairman of the Federal Reserve Board of Governors as soon as this week. The term of the current chairman, Jerome Powell, ends in May.
Just two weeks ago, financial markets and prediction markets believed Trump would choose either Kevin Hassett or Kevin Warsh to lead the Federal Reserve. Now, however, one name has surged from relative obscurity to front-runner status: Rick Rieder, BlackRock’s chief investment officer for global fixed income. In that role, Rieder manages more than $2.4 trillion in fixed-income assets.
Prediction markets such as Kalshi and Polymarket now place the odds that Trump will select Rieder at just over 50%. A recent National Bureau of Economic Research paper finds that prediction markets often provide accurate, real-time forecasts of market-moving events. If Trump does choose Rieder, it would signal a clear break with orthodoxy. Rieder has never served as a central banker or as a Federal Reserve official. That may be precisely the appeal. Trump is a nontraditional president who relishes challenging entrenched institutions and prevailing consensus. Nominating Rieder would do exactly that.
Still, Rieder’s resume is formidable. He is a graduate of the Wharton School of Business at the University of Pennsylvania and spent many years at the now-defunct Wall Street firm Lehman Brothers before joining BlackRock, one of the most powerful asset managers in the world.
As the steward of more than $2.4 trillion in fixed-income assets, Rieder has an intimate understanding of the complexity of global financial markets. He is conversant in economic theory but also deeply experienced in the realities of fast-moving capital markets. He understands how economics, politics, and markets interact to price assets, including U.S. Treasury securities. He also understands a core truth often lost in policy debates: Low and contained inflation is essential for a healthy, well-functioning economy. On those grounds, Rieder would be a good choice to lead the Federal Reserve.
But what more do we know about Rieder’s views? How would he approach the Federal Reserve’s dual mandate of price stability and full employment?
Rieder has signaled support for more aggressive interest rate cuts than those implied by the current policy path. He has argued that a federal funds rate closer to 3% would better support steady economic growth without reigniting inflation. Central to his thinking is the belief that the artificial intelligence revolution will generate a sustained increase in U.S. productivity growth. A more productive economy can grow faster without triggering inflationary pressure, much as the U.S. economy did in the late 1990s as internet technology became embedded across industry and society.
Rieder has also argued that lower interest rates would help revive the domestic housing market and provide meaningful relief to small businesses, which are far more sensitive to borrowing costs than America’s largest corporations.
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The growing embrace of Rieder by both financial markets and prediction markets suggests investors are betting that a leadership change at the Federal Reserve would bring fresh thinking to an institution that faces both an economy undergoing rapid technological change and also the fiscal reality of soaring federal deficits. Just as important, Rieder’s emergence as the front-runner signals market confidence that he would not simply bend to pressure from Trump to slash interest rates.
Decades spent in the sharp-elbowed world of Wall Street suggest Rieder is his own man. He would respect the Federal Reserve’s dual mandate and resist the pull of political expediency.
James Rogan is a former U.S. foreign service officer who later worked in law and finance for 30 years. He writes a daily note on economics, politics, markets, and social matters.