Core Conclusion - The composition of the FOMC's 12 voting members is likely to be 4 doves, 4 hawks, and 4 neutrals, indicating a marginally dovish shift compared to the current composition of 3 doves, 4 neutrals, and 5 hawks [2][8] Group 1: FOMC Personnel Changes - The current Fed Chair Powell's term ends in May next year, with five candidates considered for the position, all of whom are dovish [3][9] - The candidates' winning probabilities are as follows: Hassett (57%), Waller (23%), Walsh (14%), Riedel (4%), and Bowman (1%) [3][9] - Powell's decision to remain as a board member after stepping down as chair could limit the selection of the new chair [3][11] Group 2: Board of Governors - Among the current governors, Waller, Milan, and Bowman are dovish, while Barr is hawkish, and Powell, Jefferson, and Cook are neutral [4][12] - Milan is likely to have his term extended, with low probability of Cook being dismissed [4][13] - The new chair's selection and Powell's potential continuation as a board member will influence the board's composition [4][14] Group 3: Regional Federal Reserve Presidents - The current regional Fed presidents are all hawkish, while the incoming presidents for next year include a neutral and three hawks [5][15] - Trump faces challenges in altering the appointments of regional Fed presidents through the board, making it difficult to change the FOMC's policy stance [6][16]

Group 1 - The core candidates for the next Federal Reserve Chair are Kevin Hassett, Kevin Warsh, and Christopher Waller, as indicated by President Trump [1] - Kevin Hassett is a conservative economist and a loyal supporter of "Trumpism," likely to maintain low interest rates to support economic growth, potentially challenging the Fed's independence [2] - Kevin Warsh, a former Fed governor, is seen as a hawkish figure who may prioritize financial stability and inflation risks, having criticized quantitative easing [3] - Christopher Waller, the current Fed governor, is expected to continue the cautious, data-driven policy approach of the current Fed leadership under Powell [4] Group 2 - The selection of the Fed Chair is crucial as it influences global financial markets, affecting interest rate cycles, the strength of the dollar, and market liquidity [5][6][7] - The potential outcomes of the candidates' selections could lead to different monetary policy paths, with Hassett being the most dovish, Warsh being hawkish, and Waller representing continuity and stability [9][10]