Written by: kkk
In early August, the already turbulent personnel situation at the Federal Reserve suddenly accelerated—Director Adriana Kugler unexpectedly resigned, and the head of the Bureau of Labor Statistics was personally dismissed by Trump on the same day the non-farm payroll data was released. Just as the market had not fully digested the personnel shock, the White House made it clear: 'A decision on the Federal Reserve Chairman candidate will be made this weekend.' On August 7, according to insiders, as Trump's advisors searched for Powell's successor, Federal Reserve Director Waller was gradually becoming a popular candidate for Chairman of the Federal Reserve. Trump's advisors were impressed with Waller because he is willing to formulate policies based on forecasts rather than current data and has a deep understanding of the entire Federal Reserve system.
During a recent FOMC meeting, he, along with director Michelle Bowman, advocated for an immediate rate cut of 25 basis points, becoming one of the two members to 'vote against' for the first time in 32 years. This position aligns with Trump's calls for rate cuts, solidifying his stance as a 'reliable ally for monetary easing' in the political game between the White House and the Federal Reserve.
The race for the popular candidate for Federal Reserve Chairman
According to reports, President Trump has formally initiated the interview process for the next Federal Reserve Chairman, with the three core candidates currently identified as: Kevin Hassett, Kevin Warsh, and current Federal Reserve Director Christopher Waller.
Hassett currently serves as the Director of the White House National Economic Council and was the Chairman of the White House Council of Economic Advisers during Trump's first term, a staunch supporter of his economic policy ideas; Warsh, a former Federal Reserve Director, participated in responding to the financial crisis from 2006 to 2011. Although he has a hawkish stance, he has maintained a close relationship with Trump for a long time and has a considerable reputation on Wall Street; while Waller is currently the most watched candidate in the market, as a sitting Federal Reserve director, he voted in favor of a rate cut in the latest FOMC meeting, aligning closely with Trump's call for easing.
According to Federal Reserve appointment rules, the Federal Reserve Chairman must be a current director. The current Chairman Powell's term will end in May 2026, while the director's term lasts until January 2028—if he chooses to continue serving as a director after stepping down, Trump's candidate range for appointing a new chairman will be limited. Therefore, the recent resignation of director Adriana Kugler is seen as a critical window. Currently, Trump has selected Stephen Miran, the chairman of the White House Council of Economic Advisers, who also calls for rate cuts to serve as a Federal Reserve director. This move not only affects the monetary policy path but may also reshape the macroeconomic governance direction for the remaining time of his term.
Currently, on the decentralized prediction market Polymarket, the odds among the three candidates are gradually widening: Waller's support has risen to 45%, leading Hassett (27%) and Walsh (19%). The market seems to be betting that this 'familiar with the rules, dovish stance' current director could be Trump's most trusted successor. It's also worth noting that newly nominated Federal Reserve director Miran has particularly praised Waller, considering him a suitable candidate for Fed Chairman after Powell.
Christopher Waller: A Crypto-Friendly Federal Reserve Director
Waller was born in 1959 in Nebraska, USA. After obtaining his bachelor's degree in economics from Brigham Young University, he pursued a Ph.D. at Washington State University, and subsequently taught at Indiana University, the University of Kentucky, and the University of Notre Dame, focusing on monetary theory, financial intermediation, and macro policy. He also studied European integration at the University of Bonn in Germany. In 2009, he joined the Federal Reserve Bank of St. Louis, leading the research department for over a decade and transforming the well-known FRED database into a 'toolbox' for the global economics community. In late 2020, he was nominated by Trump to the Federal Reserve Board and became an FOMC voting member, with a term lasting until 2030.
Waller's examination of crypto assets has been calm to the point of being harsh from the very beginning. He has likened most cryptocurrencies to 'baseball cards'—with no intrinsic value, their prices depend on a fragile balance of emotions and confidence. For such highly volatile speculative items, he insists that 'the market bears its own risks' and taxpayers should not foot the bill for investment failures.
However, regarding stablecoins, Waller has shown a different side—a forward-looking selective support. As early as 2021, he publicly pointed out that if there is sound regulation and sufficient reserves, stablecoins could not only lower payment costs and improve transaction efficiency but might also become a tool to expand the international use of the dollar and consolidate its status as a reserve currency. At that time, stablecoins were still seen by many as accessories to the crypto market, but Waller had already recognized their strategic value within the global payment system. Subsequently, in multiple speeches in 2024 and 2025, he repeatedly urged Congress to legislate to prevent bank runs and disruptions in the payment system, making stablecoins truly safe 'synthetic dollars.'
In addition, Waller holds a positive attitude towards decentralized finance (DeFi). At the Vienna Macroeconomic Seminar in 2024, he traced back the reasons for the existence of financial intermediation from an economic perspective: facilitating transactions, reducing costs, and managing risks. Then, he turned to DeFi—this model uses blockchain, smart contracts, and distributed ledger technology to enable transactions without traditional intermediaries. He believes that DeFi technology can indeed bring efficiency improvements, such as 24/7 instant settlements, automated contract execution, and asset tokenization, but its core value is more about complementing rather than replacing traditional finance. Tools originating from the crypto field, such as stablecoins, distributed ledger technology (DLT), and smart contracts, can fully benefit the centralized system, improving the efficiency and safety of traditional markets.
Waller has consistently maintained that innovation should be led by the private sector, with the government's role being to 'build the highways'—the clearing infrastructure like FedNow is the lane, while the forces driving the vehicles should be market competition. However, he also warns that if non-bank payment institutions and decentralized platforms lack regulation, they may accumulate leverage, create bubbles, and ultimately jeopardize financial stability.
He is both a skeptic of crypto assets and an early discoverer of the potential of stablecoins; he can analyze the technical and economic logic of DeFi while adhering to the Federal Reserve officials' bottom line regarding systemic safety. In the balance between innovation and risk, Waller does not attempt to allow one side to completely overwhelm the other but insists on drawing a clear, executable line between the two—leaving room for growth while not abandoning the responsibility to safeguard the dam.
Waller to take the baton? The next move of the Federal Reserve
If Waller ultimately takes over as Chairman of the Federal Reserve, the market may experience a rhythm that is entirely different from Powell's. In monetary policy, while Waller anchors on data, he tends to quickly shift to a position of supporting economic growth after inflationary pressures ease. He has repeatedly opposed excessive tightening in the FOMC and has been quick to express support for rate cuts when economic data weakens. This flexibility not only helps align with the White House's fiscal stimulus and economic expansion goals but may also allow capital markets to sense a warming of liquidity earlier, which indicates a slowdown in the economy.
In the realm of crypto and payment innovations, Waller's appointment may bring clearer and more predictable regulatory pathways. He would actively support promoting stablecoin legislation, allowing it to integrate into payment and financial markets under safe and compliant conditions. His recognition of DeFi technology means that Wall Street and crypto platforms may gain more policy space in tokenization, smart contracts, and 24/7 settlements. In other words, the Federal Reserve under Waller could maintain the dominance of the dollar in the global financial system while leaving room for the compliant crypto ecosystem to grow.
From an investor's perspective, this combination reduces policy uncertainty while releasing potential benefits along two tracks: one is the asset price boost from monetary easing, and the other is the new market opportunities that may arise from the integration of crypto and traditional finance.
Summary
However, because Waller maintains a high coordination with the White House in policy matters, this has also raised concerns among some market participants about the independence of the Federal Reserve. Critics argue that if monetary policy is more influenced by political rhythms at critical moments, the Federal Reserve may find it difficult to maintain absolute neutrality between inflation pressures and election cycles. This worry resonates not only on Wall Street but also in comments from some academia and former officials—warning that once the market begins to doubt the Federal Reserve's independence, its credibility costs may rise rapidly, affecting the pricing of dollar assets and the flow of international capital.
According to procedures, even if the president decides on a nomination, Waller's appointment still requires further scrutiny and confirmation by the Senate. This stage tests his level of support in Congress and will become a barometer for the market to assess policy direction. Until the final announcement is made, investors can only price in based on rumors and interpretations, waiting for the next moves from the White House and Congress.