Trump is about to announce Powell’s replacement. One finalist backed Democrats, higher taxes and more immigration

New York (CNN) — President Donald Trump plans to announce his pick for the next Federal Reserve chair on Friday morning. Among the finalists is one man who checks many of the boxes: BlackRock executive Rick Rieder.

The influential investor has the respect of Wall Street and deep knowledge of complex financial markets. Rieder is believed to prefer lower interest rates, a top priority for a president who wants massive rate cuts. And Rieder looks the part. His frequent television appearances are playing well inside the White House.

No wonder Rieder vaulted to the top of the list of Fed chair candidates on prediction markets over the past few days.

That changed Thursday night, when Trump said his pick wouldn’t surprise people, and “a lot of people think that this person could have been there a few years ago.” That strongly suggests former Fed official Kevin Warsh, who was a finalist for Fed chair in 2017, when Trump ultimately picked current Fed Chair Jerome Powell. Warsh was at the White House Thursday shortly after Trump slammed Powell as a “moron.”

But it certainly doesn’t eliminate Rieder, who still has better chances on prediction market Kalshi than White House economist Kevin Hassett and current Fed Governor Christopher Waller.

And yet some of Rieder’s prior comments on Trump policy priorities, his lack of government experience and political donations to Trump critics could work against his candidacy for the powerful position.

Rieder, a dark-horse contender for the Fed job, has in the past criticized one of Trump’s signature legislative achievements during his first term: slashing the corporate tax rate to 21%.

“I think 21% is too low,” Rieder told CNN in March 2021. The BlackRock exec argued the benefit to business is “too high,” pointing to the fact that many corporations used their tax savings to reward shareholders with massive share buybacks.

During the 2020 campaign, Joe Biden proposed raising the corporate tax rate.

Rieder said at the time that the US economy could “definitely” withstand raising the corporate tax rate.

“I would imagine he didn’t bring that up during his interview at the White House,” quipped Stephanie Roth, chief economist at Wolfe Research.

It’s not clear if Rieder still favors a higher corporate tax rate, which is not something the Fed chair has a direct say on in the first place.

A BlackRock spokesperson declined to comment on Rieder’s five-year-old comments.

During that same 2021 interview, Rieder downplayed inflation concerns bubbling up at the time. He said inflation could accelerate to around 2.5% but stressed he wasn’t worried about “explosive” price increases.

Rieder’s comments put him within the then-consensus among economists and even Fed officials who believed inflation would not become a persistent problem.

But by June 2022, following Russia’s invasion of Ukraine, broken supply chains and aggressive stimulus from the federal government, inflation skyrocketed to a four-decade high of 9.1%.

Rieder may also have some policy differences from Trump on another top priority: immigration.

‘You need immigration’

In April 2023, Rieder voiced support for the exact opposite of Trump’s current immigration crackdown.

Echoing concerns of many mainstream economists, Rieder said the United States needs more, not fewer, foreign-born workers to offset retiring baby boomers.

“In most economies around the world, you need immigration,” Rieder said during a Morningstar podcast.

He pointed to airlines, hotels and other companies that “can’t operate at full capacity” because they “just can’t find enough labor.”

“With an aging population and, like I say, without immigration, it’s really, really hard to fix that,” Rieder said during the podcast.

Indeed, US job growth slowed dramatically last year – in part because the supply of workers has declined sharply as Trump has ramped up deportations.

In sharp contrast to Rieder’s arguments in favor of immigration, the White House last week hailed negative net migration in 2025 – the first in half a century – as among Trump’s “365 wins” in his first 365 days back in office.

“For the first time in 50 years, we are now seeing reverse migration,” Trump said last week during a White House briefing.

Donations to Dems and Never-Trumpers

At the same time, Rieder has donated in recent years to Democrats including House Minority Leader Rep. Hakeem Jeffries, Sen. Cory Booker and former Sens. Jon Tester and Sherrod Brown, according to federal filings.

The BlackRock exec has also given money to Republicans, including Never Trumpers such as Nikki Haley, Jeb Bush and former Maryland Gov. Larry Hogan.

Of course, campaign donations have almost nothing to do with Rieder’s ability to do the job of Fed chair.

But they could hurt his case at the White House, given today’s hyper-partisan environment, Trump’s history of retaliating against perceived foes and his desire to pick a loyalist for the job.

Larry Kudlow, the conservative Fox Business anchor and former Trump economist, called out Rieder’s donations to “the never-Trumper” Haley and “ultra-left-wing” Democrats earlier this week.

“Kevin Warsh and Kevin Hassett understand Trumponomics. They can be independent but still understand that the supply-side economic boom does not cause inflation. No one can be sure, though, about Wall Streeter Rick Rieder,” Kudlow wrote in a column for The New York Sun.

Asked about Rieder’s prior campaign donations, White House spokesman Kush Desai said Trump will announce his pick for the Fed “at the appropriate juncture.”

“Any and all reporting on the Federal Reserve Chairman nominations process until then is a waste of everyone’s time,” Desai said.

All 10 Fed chairs worked in government

Unlike Warsh and Hassett, Rieder’s resume also has a noteworthy gap: a lack of government experience.

According to former Fed official Vincent Reinhart, all 10 Fed chairs since 1935 had a prior position in the executive branch.

Powell, for instance, worked in the Treasury Department during the George H. W. Bush administration, while former Fed Chair Janet Yellen was a top economist in the Clinton White House.

Rieder’s lack of government experience could steepen the learning curve if he were to get the job.

On the other hand, this contrast with prior Fed picks could make Rieder even more attractive to Trump, who is not shy about busting norms. After all, neither Trump nor many of his Cabinet picks had previous government experience.

Respected on Wall Street

Ed Mills, Washington policy analyst at Raymond James, told CNN that Rieder’s prior positions and campaign donations could make for “awkward moments” during a potential confirmation hearing.

“But is there a smoking gun? Not yet,” Mills said. “And for Trump, having someone who has been in the private sector is a huge asset. Rieder is known and respected on Wall Street. And the market always tests the new Fed chair.”

Mills said Trump knows he needs a strong economy and stable markets for Republicans to avoid a bad outcome in the midterm elections this November.

The reality is there may be no perfect pick who checks all the boxes Trump is looking for in a Fed chair.

For instance, Hassett favors lower rates but is viewed by some on Wall Street as too loyal to Trump – and that could backfire by roiling the bond market.

Waller and Warsh are respected by investors but may be too independent for Trump’s liking.

“The problem is none of the candidates have all the characteristics Trump wants: someone loyal, dovish and credible to markets,” Roth said.

CNN’s Simone Pathe contributed reporting.

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