Author: kkk, BlockBeats

In early August, the already turbulent personnel changes at the Federal Reserve suddenly accelerated—Governor Adriana Kugler unexpectedly resigned, and the head of the Bureau of Labor Statistics was personally dismissed by Trump on the day the non-farm payroll data was released. Just as the market had not fully digested the personnel shock, the White House clearly stated: "A decision on the Federal Reserve chair will be made this weekend." On August 7, informed sources revealed that as Trump's advisors sought Powell's successor, Federal Reserve governor Waller was gradually becoming a popular candidate for Fed chair. Trump's advisors were impressed by Waller, as he was willing to formulate policy based on forecasts rather than current data and had a deep understanding of the entire Federal Reserve system.

At a recent FOMC meeting, he, along with Governor Michelle Bowman, advocated for an immediate 25 basis point rate cut, becoming one of the two members to "vote against" for the first time in 32 years. This stance aligns with Trump's calls for rate cuts, positioning him as a "credible ally of monetary easing" in the political game between the White House and the Federal Reserve.

The competition for the popular Federal Reserve chair candidate

Reports indicate that President Trump has officially initiated the interview process for the next Federal Reserve chair, with three core candidates currently locked in: Kevin Hassett, Kevin Warsh, and current Federal Reserve governor Christopher Waller.

Hassett is the current director of the White House National Economic Council and served as the chair of the White House Council of Economic Advisers during Trump's first term, being a staunch supporter of his economic policy ideas; Warsh is a former Federal Reserve governor who participated in addressing the financial crisis from 2006 to 2011 and has a hawkish stance but has maintained a close relationship with Trump and is well-respected on Wall Street; Waller is currently the most closely watched candidate in the market, as he voted in favor of a rate cut at the latest FOMC meeting, aligning closely with Trump's calls for easing.

According to the Federal Reserve's appointment rules, the Fed chair must be a current governor. The current chair, Powell's term will end in May 2026, while the governor's term continues until January 2028—if he chooses to remain a governor after stepping down, Trump's candidate range for a new chair will be limited. Therefore, the recent resignation of Governor Adriana Kugler is seen as a crucial window. Trump has currently selected Stephen Miran, the chair of the White House Council of Economic Advisers who also advocates for rate cuts, to serve as a Federal Reserve governor. This move not only influences the path of monetary policy but may also reshape the macroeconomic governance direction for the remainder of his term.

Currently, on the decentralized prediction market Polymarket, the odds for the three candidates are gradually widening: Waller's support rate has risen to 45%, leading Hassett (27%) and Warsh (19%). The market seems to be betting that this "rule-familiar, dovish" current governor may be Trump's most trusted successor. It is also worth noting that the newly nominated Federal Reserve governor Miran has also praised Waller, suggesting he is the suitable candidate for Fed chair after Powell.

Christopher Waller: A crypto-friendly Federal Reserve governor

Waller was born in 1959 in Nebraska, USA. After obtaining a bachelor's degree in economics from Bemidji State University, he pursued a PhD 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 conducted research on European integration at the University of Bonn in Germany. In 2009, he joined the St. Louis Fed, leading the research department for over ten years, transforming the renowned FRED database into a "toolbox" for the global economics community. At the end of 2020, he was nominated by Trump to join the Board of Governors of the Federal Reserve and became an FOMC voting member, serving until 2030.

Waller's examination of crypto assets has been calm to the point of being harsh from the beginning. He has compared most cryptocurrencies to "baseball cards"—having no intrinsic value, with prices depending on a fragile balance of sentiment and confidence. For such highly volatile speculative products, he insists that "the market bears its own risks" and that taxpayers should not be left to pay for investment failures.

However, regarding stablecoins, Waller has shown a different side—one of selective support with foresight. As early as 2021, he publicly pointed out that with adequate regulation and sufficient reserves, stablecoins could not only reduce payment costs and improve transaction efficiency but could also become tools to expand the international use of the dollar and strengthen its status as a reserve currency. At that time, stablecoins were still seen by many as mere appendages of the crypto market, but Waller had already recognized their strategic value in the global payment system. Subsequently, in multiple speeches in 2024 and 2025, he repeatedly urged Congress to legislate to prevent runs and payment system disruptions, allowing stablecoins to genuinely become a safe "synthetic dollar."

Additionally, Waller holds a positive attitude towards decentralized finance (DeFi). At the 2024 Vienna macroeconomic seminar, he traced the reasons for the existence of financial intermediaries from an economic perspective: facilitating transactions, reducing costs, and managing risks. He then turned to DeFi—this model uses blockchain, smart contracts, and distributed ledger technology to execute transactions without traditional intermediaries. He believes that the technology of DeFi can indeed bring efficiency improvements, such as 24/7 instant settlements, automated contract execution, and asset tokenization. However, its core value is more about complementing rather than replacing traditional finance. Tools like stablecoins, distributed ledger technology (DLT), and smart contracts, which originate from the crypto field, can indeed enhance centralized systems, improving the efficiency and security 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"—infrastructure like FedNow serves as the lanes, while the market's competitive forces should drive the vehicles. However, he also warns that if non-bank payment institutions and decentralized platforms lack regulation, they may accumulate leverage and create bubbles, ultimately jeopardizing financial stability.

He is both a skeptic of crypto assets and an early discoverer of the potential of stablecoins; he can analyze the technology and economic logic of DeFi while upholding the Fed officials' bottom line for system security. In the balance between innovation and risk, Waller does not attempt to let one side completely overwhelm the other, but insists on drawing a clear, executable line between the two—allowing for a runway while not abandoning the responsibility to hold the dam.

Waller takes over? The next move for the Federal Reserve

If Waller ultimately succeeds Powell as the Federal Reserve chair, the market might experience a rhythm distinctly different from Powell's. In terms of monetary policy, although Waller is data-driven, he tends to swiftly shift to a position supporting economic growth once inflation pressures ease. He has repeatedly opposed excessive tightening in the FOMC and has been quick to express support for rate cuts during periods of weak economic data. This flexibility not only helps align with the White House's fiscal stimulus and economic expansion goals but could also allow capital markets to sense a warming of liquidity in advance, indicating a slowdown in the economic cycle.

In the field of crypto and payment innovation, Waller's appointment could bring clearer and more predictable regulatory routes. He would actively support stablecoin legislation, allowing it to integrate into the 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 regarding tokenization, smart contracts, and 24/7 settlements. In other words, under Waller's leadership, the Federal Reserve may maintain the dollar's dominant position in the global financial system while providing a growth runway for a compliant crypto ecosystem.

From the investors' perspective, such a combination both reduces policy uncertainty and releases potential benefits along two tracks: one is the asset price boost brought by monetary easing, and the other is the new market opportunities that may emerge from the integration of crypto and traditional finance.

Summary

However, because Waller has maintained a high degree of coordination with the White House in policy matters, this has 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 Fed may struggle to maintain absolute neutrality between inflation pressures and election cycles. This concern resonates not only on Wall Street but also appears in comments from some academia and former officials—they warn that once the market begins to doubt the Fed's independence, its credibility cost may quickly escalate, affecting dollar asset pricing and international capital flows.

According to procedure, even if the president decides on a nomination, Waller's appointment still requires further review and confirmation by the Senate. This step not only tests his support in Congress but will also become a barometer for the market's assessment of policy direction. Before the final news is released, investors can only price in based on rumors and interpretations, waiting for the next steps from the White House and Congress.

Click to learn about ChainCatcher's job openings