On Tuesday, sources indicated that despite ongoing interviews for Federal Reserve chair candidates, President Trump appears to favor his longtime advisor Kevin Hassett for the position. This appointment could become one of the most significant personnel decisions of Trump's second term.
Trump reportedly told reporters on Sunday, "I know who I want," but declined to confirm Hassett's name when asked. Hassett, currently Director of the National Economic Council, meets two key presidential criteria: loyalty and market credibility.
Last week, when rumors surfaced about Hassett's potential nomination, long-term interest rates declined—a market reaction interpreted as evidence of his credibility. Hassett himself cited this response during a CBS interview as proof he could achieve Trump's desired rate cuts without compromising inflation credibility.
Loyalty Proves Decisive
Hassett's close relationship with the president reportedly gives him an edge over other candidates. His government service includes chairing the Council of Economic Advisers (2017-2019), returning as senior advisor during the 2020 pandemic, and assuming his current NEC role when Trump returned to office this January.
Sources confirm Hassett has privately expressed interest in the position to White House officials, considering himself the strongest candidate. Treasury Secretary Bassett has narrowed the initial list of 11 candidates to five finalists through a methodical selection process since Labor Day, though Trump appears to have made an internal decision.
The finalists include Hassett, former Fed Governor Warsh, current Governors Waller and Bowman, and BlackRock executive Rieder. While Warsh was considered a co-frontrunner this summer, associates say he no longer views himself as such.
Selection Process Nears Conclusion
Treasury Secretary Bassett has overseen this months-long public selection process, where candidates competed through media appearances and multiple interviews. Finalists have met with Bassett and will interview with Vice President Vance and White House staff this week before meeting Trump. Bassett suggested an announcement could come before Christmas.
A White House spokesperson stated, "Any discussion about Fed nominations remains speculative until President Trump makes an official announcement."
Despite strong indications favoring Hassett, sources caution Trump could still change his mind. As recently as last week, Trump reportedly sought arguments from allies supporting either Hassett or Warsh, with some noting Hassett's nomination would leave the NEC director position vacant.
Other sources suggest Bassett remains the only potential challenger to Hassett's lead. Though Bassett has publicly and privately ruled himself out, Trump reportedly told allies he still considers the Treasury Secretary a viable candidate.
Qualifications and Controversies
Beyond loyalty, Hassett holds a Ph.D. in economics with published research and prior experience as a Fed economist. His conservative credentials were affirmed by bipartisan Senate confirmation for his CEA role in 2017.
However, some former colleagues question his temperament for the position and willingness to oppose Trump when necessary. Allies who helped secure his congressional confirmation express concern over his recent public Fed criticisms.
While Hassett staunchly defended central bank independence during Trump's first term, he joined the president this year in sharply criticizing the Fed and Chair Powell. His summer accusations of partisan bias for insufficient rate cuts drew near-universal opposition from policymakers.
Powell will step down in May, making this succession unusually public compared to decades of tradition. Since Greenspan succeeded Volcker in 1987, each new Fed chair pledged policy continuity for market stability—a precedent current candidates must now break from.
The Fed has cut rates twice recently, though some officials urge caution about further reductions, including at next week's meeting, as they balance concerns over labor market weakness against persistent inflation.
