Federal Reserve Chairman Jerome Powell’s tumultuous relationship with President Trump has made quite a few headlines, but it seems the drama isn’t finished yet.
As Wall Street responds to the prospect of Trump firing Powell, the buzz around possible successors is generating its own set of surprises. Among those rumored is Bill Pulte, who currently leads the federal Housing Finance Bureau, which oversees mortgage giants Fannie Mae and Freddie Mac. Alongside him in the mix are two others named Kevin, including Kevin Warsh, a Stanford academic affiliated with the Hoover Institution.
This talk around Pulte is a bit shaky—there’s not much credibility to the idea. He’s not an economist, holding a degree in broadcast journalism instead, and at just 37 years old, his background is fairly unconventional. The speculation kicked off recently when he hinted on social media that Powell might resign.
Yes, Pulte heads an agency that deals with around $7 trillion in loans, and he’s part of the Pulte family, known for their home-building business, the Pulte Group. He’s also dabbled in private equity.
Though his online presence often revolves around meme stocks, it hasn’t really led to any concrete investments, at least not that he’s made public.
I mean, the idea of someone from the meme stock sphere running the Fed is amusing, yet it could lead to some real chaos in the bond market, right?
Then again, Trump has always favored easy money policies, and he isn’t too fond of Powell for not aligning with that perspective. He’s made some pretty unconventional cabinet choices before, so who knows?
Now, switching gears to Kevin Hassett, who is indeed a knowledgeable economist. He co-authored the book *Dow 36,000*, which made bold predictions about the market. Sure, the market saw declines during the dot-com bust, but those predictions have recently started to feel a bit more realistic.
Hassett also has a knack for being media-friendly, which is a plus in Trump’s circle. But then, one has to wonder if he’d just be a yes-man when it comes to interest rate policies, considering his ties to the president.
Which brings us to Kevin Warsh, who seems to check all the boxes. He’s comfortable in front of cameras and has solid experience, having served on the Fed’s board during the financial crisis of 2008.
Warsh is reportedly on good terms with Trump, having been a trusted voice on monetary policy. He’s also been critical of Powell’s approach regarding interest rates, particularly during the inflation surge of 2021. If given the chance, Warsh might advocate for a less interventionist approach.
That said, I genuinely think Warsh would be an excellent choice for the role, and it’s worth noting that Trump usually picks people he has a personal connection with.
As the search for a new chair continues, Treasury Secretary Scott Bessent is at the helm of this decision-making process. His background includes significant experience as a hedge fund trader, even working for notable investor George Soros.
In other words, Bessent not only knows his way around monetary policy but clearly has a strong grip on economic matters, which will be crucial in the upcoming negotiations. Still, his past might raise eyebrows among some, considering he has ties as a speculator.
We can’t wait for the confirmation hearings to unveil more about these potential candidates.
