BlackRock executive Rick Rieder is rapidly emerging as a leading candidate to succeed Jerome Powell as the next Federal Reserve Chairman, according to a government official. Powell's term is set to expire in May next year.

According to the source, Treasury Secretary Scott Bessent held a two-hour meeting with Rieder in New York on Friday, discussing monetary policy, the Federal Reserve's organizational structure, and regulatory policies. The source requested anonymity due to the private nature of the meeting.

The official indicated that Bessent has now interviewed four of the 11 publicly identified candidates for the Fed Chair position, emphasizing that the selection process remains ongoing. The candidate list is expected to expand by one or two additional names.

Rieder is one of BlackRock's most senior executives, overseeing the company's fixed income business. He joined BlackRock in 2009 after spending nearly 20 years at Lehman Brothers. BlackRock representatives did not immediately provide comment.

According to a person familiar with Bessent's thinking, Bessent was impressed by Rieder's extensive career managing large teams in the markets and his deep understanding of both micro and macro economic drivers. This person noted that if Rieder becomes Fed Chair, he would bring a calm leadership style and comprehensive knowledge of non-bank financial institutions.

The source also mentioned that Bessent appreciates Rieder's ability to employ forward-looking analytical frameworks when assessing economic conditions, rather than relying solely on retrospective data.

Earlier this week, Rieder stated in an interview that based on his interpretation of economic indicators, he believes the Federal Reserve should cut interest rates by 50 basis points, which is double the rate cut widely expected by markets for the Fed's upcoming meeting next week.

"Cutting overnight funding rates by 25 basis points is not exciting," Rieder said in the interview. The Fed could consider "how to use the balance sheet, how to deploy liquidity tools, and where the yield curve sits."

He emphasized that the Fed's independence is "crucial" because investors need confidence in the dollar, debt, and its financing, while adding that the central bank could be more "innovative."

The meeting between Bessent and Rieder also included two senior officials, one being a macroeconomist and the other possessing expertise in regulation and markets.