President Donald Trump's scheduled interview with BlackRock Chief Investment Officer Rick Rieder for the position of Federal Reserve Chair has emerged as a pivotal event, coinciding with an unprecedented criminal investigation into current Chair Jerome Powell. The dual developments, reported in January 2025, signal potential upheaval in U.S. monetary policy leadership and have already triggered market volatility.
The formal selection process for the next Fed Chair, whose term begins in February 2026, has entered a critical phase with Trump's interview of Rieder. Rieder, BlackRock's CIO of Global Fixed Income managing approximately $2.4 trillion in assets, brings over three decades of Wall Street experience but no prior Federal Reserve background. His appointment would mark a historic shift, placing a sitting asset management executive at the helm of the central bank.
Concurrently, a separate crisis has erupted involving current Chair Powell. U.S. Treasury Secretary Scott Bessent reportedly warned Trump that a federal investigation into Powell—launched by Washington D.C. Attorney Jeanine Pirro's office over allegations of false statements regarding Fed building renovation costs—is creating "a great deal of confusion" and poses risks to financial markets. The investigation was initiated without notifying the Treasury Department or senior White House officials, described by sources as "unprecedented."
In a rare video message, Powell denied the accusations and accused the Trump administration of "politicizing" the Justice Department for not implementing interest rate cuts at the president's desired pace. He stated, "We face the threat of criminal charges because we set interest rates in the public interest." The political fallout is significant, with Senator Thom Tillis announcing he will block the nomination process to replace Powell due to the investigation.
Market reactions were immediate following Bessent's concerns. The U.S. dollar fell, while bond yields and gold prices rose, reflecting investor anxiety over political interference in Fed independence. The investigation has also complicated the leadership transition; the administration had hoped Powell would depart upon the announcement of a new chair nominee, but sources indicate the probe has "cornered" Powell, eliminating that possibility.
While a Treasury Department spokesperson denied any disagreement between Bessent and Trump, the situation underscores the high-stakes environment. The next Fed Chair, whether Rieder or another candidate, will face immediate challenges including navigating post-pandemic policy normalization, balancing inflation control with employment goals, and maintaining institutional independence amid intense political pressure.
