TLDR
- Rick Rieder, BlackRock’s Chief Investment Officer, has emerged as a top contender for the role of Fed Chair.
- Rieder’s odds of securing the Fed Chair nomination have increased to 32% following a meeting at the White House.
- Former Fed Governor Kevin Warsh remains the leading candidate, but Rieder is closing the gap quickly.
- Rieder has publicly criticized the current Fed stance, suggesting the neutral rate is closer to 3%.
- His views on U.S. deficits and a creative use of the Fed’s balance sheet align with a more flexible monetary policy.
The race to replace Jerome Powell as Chairman of the Federal Reserve is heating up. Rick Rieder, BlackRock’s Chief Investment Officer for Global Fixed Income, has emerged as a leading candidate. His odds of securing the nomination have surged in recent days, positioning him as a serious contender.
Rieder’s Sudden Rise in the Race for Fed Chair
In recent weeks, Rieder’s odds of being nominated as the next Fed chair have soared. He now sits as the second-most likely candidate, with a 32% chance, up from single digits earlier in the month. This surge follows reports of a Thursday meeting between Rieder and officials at the White House, which has fueled speculation about his prospects.
Rieder’s climb in the polls has brought him closer to Kevin Warsh, the former Fed governor who remains the front-runner with roughly 44% support. The rapid shift in momentum has drawn significant attention from Wall Street and beyond. Rieder’s rise highlights a changing landscape in the search for a new Fed chair, as he has become a powerful voice in the ongoing debate over U.S. economic policy.
U.S. Deficits Could Be Stabilized by Global Demand
Rieder has become an outspoken critic of the current “higher for longer” stance maintained by the Fed under Jerome Powell. He argues that the neutral interest rate is closer to 3%, a stark contrast to the current rate, which sits in the 3.5%–3.75% range after December’s cuts. Rieder’s stance suggests a pivot toward more accommodative policies, which aligns with his broader views on economic flexibility.
Rieder has also expressed a unique tolerance for U.S. deficits, citing global demand for U.S. assets as a stabilizing force. This view has resonated with some policymakers, as the U.S. continues to navigate complex fiscal challenges. He has echoed Treasury Secretary Scott Bessent’s call for the Fed to use its balance sheet more creatively, suggesting that the central bank could support strategic sectors of the economy.
Rieder’s influence extends beyond traditional financial markets. In 2021, he called Bitcoin “interesting” and “durable,” predicting that it would be a permanent part of the investment landscape. His views on cryptocurrency seem prescient today, as BlackRock continues to dominate the cryptocurrency ETF market.
BlackRock is now the largest player in the crypto ETF space, with its Bitcoin ETF, IBIT, managing $70 billion in assets. Rieder’s involvement in BlackRock’s cryptocurrency strategy has raised eyebrows, especially as he emerges as a leading candidate for Fed chair.
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