Trump Considers Kevin Hassett for Fed Chair

Kevin Hassett, the White House's top economic adviser, has emerged as a leading contender to become the next chair of the Federal Reserve, according to people who have discussed the matter with White House officials. Hassett has a close relationship with President Donald Trump and has worked for him for almost a decade, making him one of the few advisers who have endeared themselves to the president while staying in his good graces. The selection process remains fluid, and it isn't a sure thing that Hassett will get the nod, but he has advantages that others lack, including his academic credentials and deep ties in conservative economic circles.

Key Takeaways:

• Hassett, 63, is among at least four Fed chair contenders who Trump thinks will be more responsive to his push for lower interest rates than current Federal Reserve Chair Jerome H. Powell.
• Hassett has a close relationship with Trump and has worked for him for almost a decade, making him one of the few advisers who have endeared themselves to the president while staying in his good graces.
• He is seen as a disciplined and effective media surrogate, a trait Trump has long valued in his top appointees.
• Hassett faces competition from other contenders: former Fed governor Kevin Warsh, Treasury Secretary Scott Bessent, and Fed governor Christopher Waller, each with distinct strengths.
• Warsh has deep ties to GOP economic circles and to Trump, who once said he wished he had nominated Warsh to lead the central bank instead of Powell.
• Bessent is seen as a trusted policy adviser and a key link to Wall Street.
• Waller, a sitting Fed official, offers insider knowledge of the central bank's thinking.
• Waller had signaled openness to a rate cut this month, setting him apart from most of the 19 people who have a say in Fed policymaking and favor waiting to see how Trump's agenda affects the economy before adjusting borrowing costs.

Statistics:

• Hassett has argued publicly for lower interest rates and echoed Trump's view that the Fed should do more to support growth.
• The current Federal Reserve Chair Jerome H. Powell's term as chairman doesn't expire until May 2026.
• Trump has said that Powell is doing a "terrible job" and that interest rates should be three percentage points lower.
• The Fed's $2.5 billion project to modernize its headquarters buildings has been plagued by pandemic-triggered cost overruns.

Sources:

• According to people who have discussed the matter with White House officials.
• White House officials.
• Jon Hilsenrath, a visiting scholar in Duke University's economics department who focuses on central bank issues.
• Krishna Guha of Evercore ISI.
• Tomas Philipson, a chaired professor emeritus at the University of Chicago.
• Financial Times.