U.S. President Donald Trump is accelerating the selection process for the next Federal Reserve chair, aiming to finalize the nominee by year-end. This unusually early timeline could allow the White House to exert influence on monetary policy ahead of schedule.

Trump indicated on Monday that he may announce his pick to succeed current Fed Chair Jerome Powell before the end of this year. Powell’s term expires in May next year, and Trump is currently evaluating five final candidates. Treasury Secretary Janet Yellen plans to conduct a second round of interviews with these candidates next month before presenting a shorter list for Trump’s final decision.

The five candidates include two sitting Fed governors—Christopher Waller and Michelle Bowman—White House National Economic Council Director Kevin Hassett, former Fed governor Kevin Warsh, and BlackRock executive Rick Rieder. Hassett and Warsh are widely seen as frontrunners.

Wall Street Journal reporter Nick Timiraos, often referred to as the "Fed Whisperer," noted that Trump’s nominee could fill the seat currently held by Fed Governor Stephen Miran, whose term ends in January. Miran could remain in place until the Senate confirms a successor, enabling the incoming Fed chair to participate in March and April rate-setting meetings before officially assuming the role in mid-May. This would allow the new chair to shape monetary policy direction early.

The Fed cut rates by 25 basis points in September, with Miran dissenting in favor of a 50-basis-point reduction. Markets widely expect another 25-basis-point cut at this week’s two-day policy meeting.

**Five Candidates Emerge** Treasury Secretary Yellen confirmed on Monday that the final shortlist of five candidates has been finalized. It includes two sitting Fed governors—Christopher Waller and Michelle Bowman, who also serves as vice chair for supervision—both initially nominated by Trump.

Among the other three candidates, two are considered frontrunners: White House NEC Director Kevin Hassett and former Fed governor Kevin Warsh, who was nominated by former President George W. Bush.

Timiraos reported that these two have built the closest ties with Trump, a key factor in securing the nomination. The fifth candidate is BlackRock’s Rick Rieder, who oversees the firm’s massive fixed-income business and impressed Yellen during their initial meeting this summer.

Though Yellen is leading the selection process, Trump reiterated on Monday that she is not a candidate herself. However, sources familiar with the discussions suggest she could still be chosen if Trump remains unsatisfied with other options.

**Pros and Cons of Early Appointment** Historically, the White House announces a new Fed chair three to four months before the incumbent’s term ends. An early announcement allows the nominee to shape market expectations on rate policy.

Timiraos noted that Trump’s pick could fill Miran’s board seat, enabling the incoming chair to vote at March and April meetings—two months before their official term begins. This institutionalizes early influence over policy direction.

However, premature selection risks creating awkward dynamics. The successor may either challenge future colleagues’ decisions publicly or defend Fed actions, potentially angering Trump. While the chair guides rate decisions, broader committee approval is required.