Hassett Becomes a Leading Candidate for Next Fed Chair
According to The Wall Street Journal on Tuesday, citing informed sources, Kevin Hassett, the Director of the National Economic Council, is becoming a strong contender for the next Federal Reserve Chair. It is reported that Hassett met with Trump at least twice in June to specifically discuss the position, highlighting his importance in Trump's mind, making him a popular candidate for the position.
The position of the Federal Reserve Chair is crucial for the monetary policy direction of the U.S. and the world, always drawing significant attention. The current Fed Chair, Jerome Powell, will step down in May 2026. During his term, Trump has often expressed dissatisfaction with his policies, especially criticizing him for not lowering interest rates and hinting at nominating a successor soon, laying the groundwork for a change in the Fed Chair candidate. As a core economic advisor to the White House, Hassett has long been involved in the formulation and implementation of U.S. economic policy. His economic philosophy is likely aligned with the policy orientation of the Trump administration, which might be a key reason for his strong candidacy.
Candidates and Backgrounds for the Next Fed Chair
Trump has previously suggested that he has three to four candidates in mind for the Fed Chair position. Besides Hassett, the candidates include former Fed governor Kevin Warsh, current Fed governor Christopher Waller, and Treasury Secretary Scott Besant. These candidates all have extensive experience and influence in the field of economics with differing policy positions.
Former Fed governor Kevin Warsh is familiar with the Fed's operational mechanisms and has a deep understanding of monetary policy; current Fed governor Christopher Waller has been involved in policymaking within the Fed and has a direct insight into current economic conditions and the transmission of monetary policy; Treasury Secretary Scott Besant has an advantage in coordinating government fiscal and monetary policy. Meanwhile, as a White House economic advisor, Hassett can more directly understand Trump's economic goals and policy demands, potentially offering greater convenience in policy coordination.
However, these candidates remain in the running stage, and who will ultimately emerge needs to wait for Trump's official nomination and subsequent procedures. But regardless of who is chosen, the decisions of the next Fed Chair will have profound effects on U.S. interest rate policy, economic stability, and even the global financial market.
Potential Impact of Changes in the Fed Chair
The Federal Reserve, as the central bank of the U.S., plays a crucial role in the direction of the U.S. economy through its monetary policy. As the core decision-maker, the Fed Chair's policy preferences directly influence key policies such as interest rate adjustments and money supply. The U.S. currently faces multiple challenges, including inflation and employment, and once the next Fed Chair is determined, the market will closely monitor their policy orientation.
If Hassett is ultimately elected, considering his close interaction with Trump and Trump's preference for low interest rates, the market might expect the Fed to lean towards a more accommodative monetary policy to support economic growth, potentially affecting the dollar exchange rate, stock market, and bond market. Should other candidates be elected, they will also formulate monetary policy according to their own policy philosophies, eliciting different market responses.
Additionally, the change in the Fed Chair could also affect market confidence in the continuity and stability of U.S. economic policy. In the current complex and volatile global economic context, the direction of U.S. monetary policy is closely watched globally, and the selection and policy direction of the next Fed Chair will be a key focus for global financial markets.
