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 upheaval, the White House made it clear: "A decision on the Federal Reserve Chair will be made this weekend." On August 7, sources revealed that as Trump's advisors searched for Powell's successor, Federal Reserve Governor Christopher Waller was gradually becoming a popular candidate for the Fed Chair. Trump's advisors were impressed with Waller because he was willing to base policy on forecasts rather than current data, and he 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 position aligned with Trump's call for rate cuts, solidifying his role as a "trusted monetary easing ally" in the political game between the White House and the Federal Reserve.

The Race for the Federal Reserve Chair

According to reports, President Trump has officially initiated the interview process for the next Federal Reserve Chair, with three core candidates currently identified: Kevin Hassett, Kevin Warsh, and current Federal Reserve Governor Christopher Waller.

Hassett is currently the Director of the White House Council of Economic Advisers and served as the Chair of the Council 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. Although he has a hawkish stance, he 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 call for easing.

According to Federal Reserve appointment rules, the Federal Reserve Chair must be a current Governor. The current Chair Powell's term will end in May 2026, while the Governor's term lasts until January 2028—if he chooses to continue serving as a Governor after stepping down, Trump's candidate pool for appointing a new Chair will be limited. Therefore, the recent resignation of Governor Adriana Kugler is seen as a critical window. Trump has now selected White House Council of Economic Advisers Chair Stephen Miran, who also advocates for rate cuts, to serve as a Federal Reserve Governor. This move not only affects the path of monetary policy but may also reshape the direction of macroeconomic governance for the remainder 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 Warsh (19%). The market seems to be betting that this "familiar with the rules, dovish" current Governor may be Trump's most trusted successor. It is also noteworthy that newly nominated Federal Reserve Governor Miran has particularly praised Waller, considering him a 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 Bismarck State University, he pursued a Ph.D. at Washington State University, subsequently teaching at Indiana University, the University of Kentucky, and the University of Notre Dame, focusing on monetary theory, financial intermediation, and macro policy. He also researched European integration at the University of Bonn in Germany. In 2009, he joined the St. Louis Federal Reserve, leading the research department for over a decade and transforming the well-known FRED database into a "toolbox" for the global economics community. At the end of 2020, he was nominated by Trump to join the Federal Reserve Board and became a voting member of the FOMC, with a term lasting 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"—lacking intrinsic value, with prices dependent on a fragile balance of emotions and confidence. For such highly volatile speculative products, he insists that "the market should bear its own risks," and taxpayers should not be left to cover 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 proper regulation and sufficient reserves, stablecoins could not only reduce payment costs and improve transaction efficiency but could also become a tool to expand the international use of the dollar and solidify its status as a reserve currency. At that time, stablecoins were still seen by many as an accessory to 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 disruptions in the payment system, allowing stablecoins to truly become a safe "synthetic dollar."

Additionally, Waller holds a positive attitude towards decentralized finance (DeFi). At the 2024 macroeconomic seminar in Vienna, he traced the reasons for the existence of financial intermediation from an economic perspective: facilitating transactions, reducing costs, and managing risks. He then turned to DeFi—this model utilizes blockchain, smart contracts, and distributed ledger technology to allow transactions without traditional intermediaries. He believes that DeFi technology can indeed bring efficiency improvements, such as 24/7 instant settlement, automated contract execution, and asset tokenization, but its core value is more supplementary than substitutive to traditional finance. Tools originating from the crypto field, such as stablecoins, distributed ledger technology (DLT), and smart contracts, can fully feed back into centralized systems, enhancing the efficiency and security of traditional markets.

Waller insists 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 driving force should be market competition. 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 adhering to the Federal Reserve officials' bottom line regarding system safety. 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 boundary between the two—leaving room for running while not abandoning the responsibility of holding the dam.

Waller Takes Over? The Next Move of the Federal Reserve

If Waller ultimately takes over as Federal Reserve Chair, the market may experience a rhythm distinctly different from Powell's. In terms of monetary policy, while Waller is data-driven, he tends to quickly shift to a position supporting economic growth once 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 is weak. 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 in advance, which signifies a slowdown in the economic cycle.

In the realm of crypto and payment innovation, Waller's appointment could bring a clearer and more predictable regulatory path. He would actively support the push for stablecoin legislation, allowing them 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 settlement. In other words, the Federal Reserve under Waller's leadership may maintain the dollar's dominant position 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.

Conclusion

However, because Waller maintains a high degree of coordination with the White House on policy, 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 Federal Reserve may struggle to maintain absolute neutrality between inflationary pressures and election cycles. This concern resonates not only on Wall Street but also appears in comments from some academics 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 procedure, even if the president decides to nominate, Waller's appointment still requires further review and confirmation by the Senate. This step will not only test his support in Congress but will also serve as a barometer for the market to assess the direction of policy. Until the final announcement is made, investors can only price in rumors and interpretations, waiting for the next moves from the White House and Congress.

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