"Trump's Economic Adviser Hassett Emerges as Leading Candidate for Next Fed Chair... Will Rate Cuts Gain Momentum?"

Bloomberg Reports

Bloomberg News reported on November 25 (local time) that Kevin Hassett, Chairman of the United States White House National Economic Council (NEC), has emerged as a leading candidate for the next Chair of the Federal Reserve (Fed).

Kevin Hassett, Chairman of the United States White House National Economic Council (NEC). Photo by AP Yonhap News

The news outlet, citing anonymous sources, stated that Chairman Hassett is being considered a strong contender because he is a key aide whom former President Donald Trump knows well and trusts.

According to the sources, Chairman Hassett is viewed as someone who could reflect President Trump's desired policy of lowering interest rates in the Fed's monetary policy. If he is nominated as the next Fed Chair, President Trump would be able to more directly project his policy preferences onto the central bank, a position that is expected to maintain political independence.

Nominating the Fed Chair and its board members is considered the most direct way for the President to influence central bank monetary policy. During his first term, President Trump nominated Jerome Powell as the current Fed Chair, but when Powell did not cut rates as quickly as Trump had hoped, Trump publicly criticized him before and after the start of his second term.

Chairman Hassett is regarded as a candidate who would effectively incorporate President Trump's aggressive calls for rate cuts into monetary policy. In a Fox News interview on November 20, Hassett said that if he were the Fed Chair, he would "cut rates right now," adding, "Given the various indicators, it should be done immediately."

However, given President Trump's history of making unpredictable decisions regarding appointments and policy, some observers note that it is difficult to say the final candidate has been confirmed before an official announcement. White House spokesperson Karoline Leavitt commented, "No one knows until the President actually makes a decision," and added, "Please stay tuned."

Chair Powell's term is set to expire in May 2026. Alongside Chairman Hassett, Christopher Waller, a current Fed Governor, and Kevin Warsh, a former Fed Governor, are also being mentioned as potential successors. Michelle Bowman, Fed Vice Chair, and Rick Rieder, Chief Investment Officer (CIO) of Global Fixed Income at BlackRock, are also considered strong candidates. On the same day, Secretary of the Treasury Scott Bessent said in a CNBC interview that President Trump may announce his nominee for the next Fed Chair before the Christmas holiday on December 25.

Meanwhile, following the news that Chairman Hassett, a supporter of rate cuts, has emerged as a leading candidate for the next Fed Chair, U.S. Treasury yields are declining. The yield on the U.S. 10-year Treasury note, the global benchmark for bond yields, dropped by 3 basis points (1bp = 0.01 percentage point) from the previous day to 4.0%. The yield on the 2-year Treasury note, which is sensitive to monetary policy, fell by 2 basis points to 3.46%.