Reports from Bloomberg suggest that White House National Economic Council Director Kevin Hassett is the leading candidate to replace Fed Chair Powell, according to sources familiar with the matter. Treasury Secretary Bessent mentioned on CNBC that President Trump may announce his decision before Christmas.
While Fed governor Chris Waller was previously considered the frontrunner, recent speculation has shifted towards Hassett being Trump’s preferred choice. In fact, Hassett’s odds surged to 50% on Polymarket. should he be selected.
Aligning with Trump’s views on interest rate policies, Hassett is seen as a close ally who could potentially implement the president’s desired changes at the central bank. Bloomberg’s sources suggest that Hassett is likely to bring Trump’s approach to rate cuts to the Fed.
Hassett has publicly expressed his support for lowering interest rates and criticized the Fed’s handling of inflation post-pandemic. With Trump’s history of criticizing Powell and the Fed, the selection of the next chair is crucial for maintaining the president’s trust and market stability.
Secretary Bessent has been overseeing the selection process, narrowing down the candidates to a final list of five contenders, including Hassett. Interviews with these finalists are expected to conclude soon, with the final decision to be made public shortly after.
Despite the likelihood of a dovish replacement, Trump is known for surprising personnel decisions, so the nomination remains uncertain until officially announced. The next Fed chair is expected to serve a 14-year term starting in February, succeeding Stephen Miran.
The anticipation of a new chair has influenced market movements, with stocks rising and bond yields fluctuating in response to the potential changes at the Fed.