The betting markets surrounding potential candidates for the next chair of the Federal Reserve have seen considerable turbulence, particularly with the emergence of BlackRock’s Rick Rieder as a front-runner. Rieder, currently serving as BlackRock’s chief investment officer for global fixed income, has established a notable reputation for his upbeat stance on cryptocurrencies, asserting that bitcoin is poised to replace gold as a superior store of value.
Rieder first shared his optimistic view on bitcoin back in 2020, a period when the digital asset landscape was still in its nascent phases. He articulated that bitcoin’s functional advantages make it far more practical than traditional gold bullion. “It’s so much more functional than passing a bar of gold around,” Rieder noted in a CNBC interview. His recent comments further support this perspective, advocating for bitcoin’s inclusion in investment portfolios. In a September interview, while bitcoin was trading above $112,000, Rieder forecasted its continuing rise, remarking on its role as a stabilizing asset alongside gold. Presently, however, bitcoin is valued around $88,000 due to various economic pressures, including anticipated tariffs and geopolitical uncertainties.
With Federal Reserve Chairman Jerome Powell’s term set to expire on May 15, President Donald Trump faces a critical decision. Trump chose Powell for the chairmanship and has since categorized him as his economic adversary, criticizing his tenure with terms like “dumb” and “stupid,” and even nicknaming him “Mr. Too Late.” Amidst this backdrop, Trump has stirred speculation about potential replacements, contributing to a fluctuating prediction market around the Fed chairship.
Rieder’s odds on Polymarket shot up from under 3% to nearly 53% before settling at about 48%. He has expressed gratitude for being included among potential candidates and has echoed Trump’s frustrations concerning the Fed’s conservative pace in lowering interest rates. During a recent trip to Davos, Trump praised Rieder’s credentials, further escalating speculation about his candidacy.
The role of the Fed chair transcends mere policy mechanics; it encompasses a broader influence on the perception of the U.S. economy. A chairperson who champions cryptocurrency would mark a significant shift in the traditional landscape, especially since Powell has largely deferred supervisory responsibilities to the vice chair, Michelle Bowman. Rieder’s enthusiasm for crypto may not dramatically alter regulations surrounding stablecoins or central bank digital currencies, but it would introduce an influential pro-crypto voice into the Fed’s discussions.
As Powell’s leadership is set to end, it remains uncertain whether he will continue his role as a regular governor on the Fed board for an additional two years or choose to depart completely. His ongoing presence could retain the centrist approach within the Federal Open Market Committee, potentially stymying the opportunities for a Trump appointee if he remains.
Adding to the intrigue, Trump’s administration has recently escalated its scrutiny of Powell, with the Department of Justice investigating the chairman’s remarks regarding renovations at the Federal Reserve buildings. Powell responded to the situation directly, reaffirming the Federal Reserve’s commitment to setting interest rates based on public benefit rather than presidential influences, a stance that could further entrench the division between the administration and the central bank.
