US GDP Roars at 4.4% as Trump Eyes BlackRock’s Rieder for Fed Chair

Washington — The US economy is running hotter than policymakers anticipated, creating a complex backdrop for the Federal Reserves upcoming decisions and the looming leadership transition. Data released Thursday showed 3Q Real GDP annualized growth revised upward to 4.4% (from 4.3%), driven by resilient consumer spending and a surge in corporate investment in AI infrastructure.

Data Resilience vs. Rate Cut Bets

The “soft landing” narrative is morphing into a “no landing” reality for the moment.

• Sticky Inflation: Core PCE remains stubborn at 2.8%YoY.
• Labor Market: Jobless claims remain low at 200k.
• Market Pricing: Swap markets are now pricing in less than two full rate cuts for the year, a sharp hawkish repricing.

Despite the data demanding higher-for-longer rates, Trumps pressure regarding interest rates is intensifying. The President has explicitly called for lower rates to boost competitiveness, setting up a clash between economic reality and political desire.

The Succession Drama: Rick Rieder Emerges

The search for Jerome Powell‘s successor has taken a sharp turn. While former Fed Governor Kevin Warsh remains a contender, prediction markets have seen a massive spike in the probability of Rick Rieder, BlackRock’s CIO of Global Fixed Income, taking the helm.

Trump described Rieder as “impressive” following a private interview. A Rieder nomination would signal a shift toward a market-centric Fed, potentially more attuned to bond market liquidity needs than pure academic orthodoxy. However, Rieders lack of government experience compared to Warsh makes him a “wildcard” choice that could introduce volatility to bond markets already on edge about US fiscal trajectories.

Market Reaction

Treasury yields jumped on the strong data, with the 2-year yield rising to 3.61%. The bond market is now caught in a pincer movement: strong growth pushing yields up, and political pressure pushing for artificial suppression.