With Jerome Powell’s tenure as Federal Reserve Chair set to conclude in early 2026, the Biden administration has begun quietly reviewing potential successors as financial markets brace for the next phase of U.S. monetary leadership. The decision comes at a crucial moment: inflation has eased but remains above the Fed’s target, while bond markets continue recalibrating around the most aggressive tightening cycle in four decades. For investors worldwide, including in Israel, the selection of the next chair could influence global yield curves, dollar stability, and capital flows.

The continuity candidate: Lael Brainard

Often viewed as the frontrunner, Lael Brainard, currently head of the National Economic Council and formerly the Fed’s Vice Chair, represents a continuity-driven choice. Brainard has consistently supported data-dependent rate policy and has emphasized the need for strong regulatory oversight, particularly for large financial institutions. Her academic and central banking background suggests a measured approach to rate cuts—but one sensitive to labor market slack and financial stability. Markets generally view Brainard as a steady hand, which could reduce volatility across U.S. Treasuries and emerging-market currencies, including the shekel.

The institutionalist: Austan Goolsbee

Austan Goolsbee, President of the Chicago Fed, has gained prominence for highlighting the real-economy effects of monetary tightening. While not seen as a dove, Goolsbee has stressed the importance of understanding how rate hikes transmit unevenly across sectors—especially housing and small businesses. His leadership could mean a more cautious easing path and robust focus on labor-market resilience. For fixed-income investors, his selection might reinforce expectations of a slower normalization cycle, with knock-on effects for global bond markets and FX stability.

The regulatory heavyweight: Sarah Bloom Raskin

Sarah Bloom Raskin, a former Fed Governor and Deputy Treasury Secretary, is known for her strong stance on financial regulation and systemic risk. Her policy orientation signals tighter scrutiny of large banks and possibly enhanced climate-risk supervision. Markets may interpret her appointment as leaning toward a structurally stronger regulatory environment, potentially affecting bank valuations. While less vocal on interest-rate strategy, her approach could reinforce broader macroprudential stability, influencing long-horizon investment sentiment.

The regional candidate and the market favorite: Raphael Bostic

Raphael Bostic, President of the Atlanta Fed, has emerged as a respected voice during recent inflation cycles. Bostic emphasizes long-run employment conditions and has argued for “long enough” restrictive policy to ensure inflation expectations remain anchored. Investors see him as a pragmatic centrist who avoids extremes—potentially offering smoother market communication and fewer policy surprises. His Fed leadership could support tighter forward guidance and predictable rate paths, guiding bond traders and currency strategists.

The outsider economist: Lisa Cook

Lisa Cook, currently a Fed Governor, brings academic depth in macroeconomics and innovation-driven growth. If chosen, she would represent a shift toward a more research-focused approach to monetary policy. Cook has supported the Fed’s cautious stance on rate cuts but emphasizes long-term productivity and equality considerations. Markets may view her as less predictable in the near term, though her analytical framework could add rigor to debates on inflation dynamics and labor-market evolution.

Looking ahead, the White House is expected to intensify its selection process over the next year as inflation data, growth trends, and financial stability concerns evolve. For markets, the key question is how the next chair will balance rate cuts with risks of rekindling inflation, manage regulatory expectations, and communicate with investors navigating a post-tightening landscape. The decision will shape not only U.S. policy but also global monetary conditions—from Israeli bond pricing to currency hedging strategies—making the Fed succession one of the most consequential macro events on the 2025–2026 horizon.