What's happened
President Trump is close to selecting a new Federal Reserve chair, with Kevin Hassett emerging as the front-runner. The decision is expected soon, amid ongoing debates over interest rate policies and the future direction of the central bank.
What's behind the headline?
The upcoming Fed chair appointment is a pivotal moment for U.S. monetary policy. Trump’s clear preference for Hassett signals a potential shift toward more aggressive rate cuts, aligning with his long-standing criticism of Powell. This move could lead to a more politicized central bank, risking independence. The market’s betting on Hassett suggests investors expect a rapid easing of monetary policy, which could stimulate growth but also risk inflation. The broader economic context—high inflation, layoffs, and uncertain data—adds pressure on the Fed to act decisively. If Hassett is appointed, he will likely advocate for policies that favor short-term economic boosts, possibly at the expense of long-term stability. The appointment process itself underscores the political influence on monetary policy, raising questions about the Fed’s future independence and the potential for policy swings based on political cycles.
What the papers say
The New York Times reports that Trump is nearing a decision, with Hassett as the front-runner, emphasizing his loyalty and media presence. CNBC highlights the ongoing interviews and the market’s betting on Hassett, noting the uncertainty about whether Trump will make a quick decision or delay. Charles Gasparino from the NY Post underscores Trump’s gut-driven approach and his preference for Hassett, who is seen as TV-ready and well-qualified. The articles collectively reveal a central theme: Trump’s desire for a Fed chair aligned with his economic agenda, with market expectations heavily favoring Hassett’s appointment, which could significantly influence U.S. monetary policy in the coming months.
How we got here
Trump has been actively seeking a replacement for Fed Chair Jerome Powell, whose term ends in May 2026. The president has publicly criticized Powell for not lowering interest rates quickly enough and has expressed a preference for a candidate who will prioritize rate cuts. Hassett, a longtime Trump loyalist and current director of the White House's National Economic Council, is seen as the leading contender, partly due to his close relationship with Trump and his media presence. The process includes interviews with other candidates like Kevin M. Warsh, Christopher Waller, and Rick Rieder, though Hassett remains the favorite. The decision comes amid broader economic concerns, including inflation and a cautious Fed stance on rate cuts.
Go deeper
More on these topics
-
Jerome Hayden "Jay" Powell is the 16th Chair of the Federal Reserve, serving in that office since February 2018. He was nominated to the Fed Chair position by President Donald Trump, and confirmed by the United States Senate.
-
Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
-
Kevin Allen Hassett (born March 20, 1962) is an American economist who has been the director of the National Economic Council since 2025. He was the senior advisor and chairman of the Council of Economic Advisers from 2017 to 2019.
Hassett has worked...