The big news this week was the announcement of Fed Governor Kugler’s replacement. President Trump said he will fill the vacancy with Council of Economic Advisors Chair Stephen Miran. While Trump noted he is still searching for a permanent replacement, Miran’s appointment makes him a serious contender for the next Fed Chair.
This also signals that Kevin Hassett may be less likely to get the nod. Right now, we see Kevin Warsh and Stephen Miran as the frontrunners. That said, the administration announced today they are widening the search, adding names like former St. Louis Fed President James Bullard, former Bush economic adviser Marc Sumerlin, current Fed Governor Christopher Waller, and a few others to a list of about ten candidates. Bessent will be leading the search and conducting initial interviews.
It’s notable that instead of narrowing the field, they’re opening it up. Previously, Trump had said there were four strong candidates—Warsh, Hassett, Waller, and Miran. Still, with Miran stepping in now, we think the Fed is likely to lean more dovish moving forward, which is generally positive for interest rates.
In the markets today, yields on the 10-year Treasury moved higher and nearly tested resistance at 4.29%—one of the reasons we locked two days ago. Mortgage Bonds held up a bit better, finishing the day only slightly lower.