Will Waller Take Over Powell’s Role at Fed?

The departure of Jerome Powell from his position appears imminent as speculation rises around the timing of his exit following Kugler’s recent resignation. This development has intensified discussions about potential successors and revealed a growing dissent within the Federal Reserve. The prospect of upcoming meetings diverging from the status quo signals a possible shift. Amidst this atmosphere, eyes are turning towards potential candidates poised to succeed Powell.

Who is Emerging as a Potential Leader?

Christopher Waller is prominently featuring among the names being considered for Fed Chair. Known for his readiness to implement interest rate cuts, Waller’s candidacy gained traction before last week’s meeting. His consistent opposition to Powell, alongside Bowman, particularly concerning interest rate policy, sets him apart as a significant contender.

Waller’s engagement with Donald Trump’s team has bolstered his visibility as a viable Fed Chair candidate. Reports suggest Trump’s advisors favor Waller for his future-oriented approach that values forecasts over current metrics. Despite these discussions, Waller and Trump have not yet convened, adding an element of uncertainty to his prospects.

How Will Fed Decisions Affect Cryptocurrency?

Donald Trump is prepared to introduce a new executive order on cryptocurrencies at 19:00, aimed at escalating their market value. Concurrently, recent Federal Reserve communications indicate a strong push towards reducing interest rates, with two out of three members voicing support for cuts. With Kugler replaced, five members now advocate for rate reductions, suggesting a potential September cut alongside further decreases by year-end.

During this period, Fed member Bostic has shared his perspectives on potential economic developments:

“Numerous economic scenarios might unfold, making probability assessments challenging. The economy is expected to continue slowing, yet the implications for employment and inflation remain uncertain.

Firms are taking a ‘wait and see’ approach regarding employment. Price pressures are likely over the next 6 to 12 months, putting additional pressure on the Fed.

The key question for the Fed is whether tariffs will change prices temporarily or more permanently.

Policymakers won’t react to a one-time price change, yet there are compelling reasons for skepticism.

I doubt the tariffs’ effects will be temporary. The manner of tariff implementation complicates impact determination, suggesting a longer-than-expected duration.

Businesses are employing various approaches to address price adjustments, sparking debates about changing expectations. I expect businesses will continue adapting to tariffs over the coming year.

Small businesses face significant tariff impacts due to supply chain constraints.

Price changes are still unfolding. Pressure on low-income consumers is growing, with pandemic savings exhausted.

Consumer reactions to further price hikes are uncertain. Markets’ ease in overcoming tariffs’ price impact is surprising. I anticipate continued high volatility.”

The critical emphasis in Bostic’s comments include:

“A rate cut remains appropriate this year, although many data releases will occur before the September meeting. Employment data has indicated that risks to the labor market are much higher than those seen before the last meeting.”

Key points derived from the discussion include:
• Christopher Waller is being seriously considered for the Fed Chair role, highlighted by support from Trump’s advisors.
• Interest rate cuts seem likely for the remainder of the year, affecting economic and cryptocurrency forecasts.
• Bostic’s insights underscore uncertainty in economic impacts and possible volatility resulting from tariffs and consumer responses.

As uncertainty looms regarding Powell’s succession, the economic implications are broadening. Speculation centers on how new leadership might reshape monetary policy and its direct influence on markets, particularly amidst evolving economic challenges and opportunities within the cryptocurrency sector.