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Powell's Successor Faces a Complex Economy

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  Published in House and Home on Saturday, February 14th 2026 at 3:26 GMT by Fortune
      Locales: Washington, D.C., Virginia, Pennsylvania, UNITED STATES

The Shifting Economic Landscape

The economic environment Powell's successor will inherit is vastly different from the one he took over. While Powell navigated the initial shocks of the COVID-19 pandemic and the subsequent recovery, the new Chair will grapple with potential long-term consequences of pandemic-era policies, evolving global economic powers, and a persistently complex inflation picture. The US economy currently finds itself in a precarious balance - attempting to achieve full employment without reigniting inflationary pressures. Any misstep by the Fed could trigger a recession or necessitate drastic policy reversals.

The Key Contenders: Profiles and Platforms

The White House, in collaboration with Congress and input from the financial community, will ultimately decide who fills the role. Here's a detailed look at the frontrunners:

• Kevin Hassett: A veteran of the Trump administration, serving as Chairman of the Council of Economic Advisers (CEA), Hassett represents a distinctly supply-side economic perspective. His emphasis on tax cuts and deregulation, while potentially stimulating economic growth, could also exacerbate income inequality and raise concerns about fiscal sustainability. A second term under a different administration might see a tempering of these views, but his core beliefs remain rooted in reducing government intervention and fostering a business-friendly environment. His experience within the executive branch provides him with valuable political acumen, but his ideological alignment might be a point of contention with a potentially Democratic White House.

• John Wallers: Like Hassett, Wallers is a product of the Trump administration, having served as a senior advisor to Treasury Secretary Steve Mnuchin. He's generally considered a fiscal conservative with a focus on government spending and debt reduction. Wallers' experience centers around the practical application of economic policy within a large bureaucratic organization. He would likely prioritize maintaining a stable financial system and adhering to established budgetary principles. While perhaps less ideologically driven than Hassett, Wallers presents a traditional approach to monetary policy.

• Christopher Waller: The advantage Christopher Waller possesses as an incumbent member of the Federal Reserve Board of Governors cannot be understated. He understands the internal workings of the Fed, its culture, and its intricate decision-making processes. Waller has publicly advocated for a data-dependent approach to monetary policy, suggesting a willingness to adjust policy based on real-time economic indicators rather than adhering to pre-set targets. This pragmatism, coupled with his emphasis on financial stability, positions him as a moderate candidate capable of building consensus. However, his voting record on the Board will be scrutinized closely by both sides of the political aisle.

• Beth Ann Rieder: Professor Rieder represents a new voice in the conversation. Her academic background at the University of Chicago's Booth School of Business, specializing in financial markets and risk management, offers a fresh perspective. Her research likely provides a nuanced understanding of systemic risks and the evolving landscape of financial instruments. While less politically connected than the other candidates, her expertise in complex financial modeling could prove invaluable in navigating the increasingly intricate challenges facing the modern financial system. Rieder's lack of prior government service is both a strength and a weakness; she's untainted by political baggage but lacks the practical experience of navigating the Washington D.C. bureaucracy.

Political Dynamics and Potential Challenges

The appointment process will be intensely political. The balance of power in Congress, the prevailing political climate, and the specific priorities of the President will all play a significant role. A divided government could lead to protracted confirmation battles, potentially hindering the Fed's ability to respond effectively to economic challenges. Furthermore, the rise of populist economic policies and growing concerns about income inequality are likely to influence the debate, with pressure mounting for the Fed to address these issues alongside its traditional mandate of price stability and full employment.

The next Fed Chair will face a daunting array of challenges: managing persistent inflation, balancing competing demands for economic growth and stability, navigating the complexities of the global financial system, and potentially addressing the risks posed by emerging technologies like cryptocurrencies. The ability to communicate effectively with the public, build consensus among diverse stakeholders, and adapt to rapidly changing circumstances will be critical for success. Ultimately, the selection of the next Fed Chair will be a defining moment for the US economy, shaping its trajectory for years to come.