Kevin Hassett could give Trump control of the Federal Reserve

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Federal Reserve Chair Kevin Hassett? That’s a real possibility.

Five candidates are still left standing for what might be the most important job in the U.S. economy. The search is well underway for the next chair of the Fed with Jerome Powell’s four-year term ending in May — only six months from now.

Powell has endured months of unsparing attacks from President Donald Trump, who has demanded lower interest rates and tried to remake the Fed as a deferential institution. The president this week again reiterated his desire to oust Powell, saying that he’d “love to fire his ass.”

The next Fed chair may have to armor themselves against the president’s scorched-earth approach — unless it’s Hassett, who has already signaled he would endorse Trump’s desire for super-sized rate cuts.

“I think that the president thinks rates could be a lot lower, and I agree with him on that,” Hassett said during a discussion at the Economic Club of Washington D.C. last week. He said he’d back a 50 basis point cut in December, an amount that’s double the preceding two interest rate deductions.

Hassett added that he’d accept the Fed chair post if it were offered to him. On Monday, Hassett batted down the idea that he wouldn’t step out of line from Trump.

“I just totally reject that,” he said in a CNBC interview. “The bottom line is that you do the job that you have. If somebody said they’re going to be the Fed chair, then their job 100% of the time is to run an independent, data-driven Fed.”

Other candidates for the post include Fed Governors Christopher Waller and Michelle Bowman; ex-Fed Governor Kevin Warsh, and Blackrock investment executive Rick Rieder. Waller and Bowman are both Trump appointees, while Warsh was tapped to the Fed by President George W. Bush.

Trump has said he intends to name Powell’s replacement by the end of the year. A research note from the financial firm Erste Group says all five candidates have expressed support for lower interest rates to varying degrees, reflecting a widespread desire for easy money that fortifies an economy weighed down by Trump’s blitz of tariffs.

But some investors are particularly concerned about the prospect of Hassett’s appointment, since it would signal a political turn for an institution that has traditionally kept the executive branch at arm’s length.

“[Hassett’s] appointment therefore carries the highest risk of a market reaction,” Erste Group Analyst Maurice Jysda wrote in a Nov. 7 note.

Treasury Secretary Scott Bessent is spearheading the next round of interviews, with the goal of presenting finalists to Trump by Thanksgiving. Bessent’s responsibility is certainly both large and tricky to handle. Trump never truly forgave ex-Treasury Secretary Steven Mnuchin, who recommended Powell for Fed chair during his first term.

Bessent was caught in the crossfire, even though Trump has occasionally expressed a desire to install him as Fed chair. During a speech at the U.S.-Saudi Investment conference on Wednesday, Trump toyed with firing Bessent since he rode to Powell’s defense over the summer.

“The only thing Scott’s blowing it on is the Fed,” Trump said. He added of Bessent: “If you don’t get it fixed fast, I’m gonna fire your ass.”

A White House official said on condition of anonymity that the president and the administration “maintain immense confidence in Secretary Bessent,” noting Bessent is spearheading the Fed chair interviews.

Hassett — who also served as a top economic adviser in the first Trump White House — has voiced major frustration with the Fed, in tandem with the president’s attacks. He echoed Trump in accusing the Fed of being “late to the game” slashing interest rates and blasted what he described as partisanship at the central bank.

The next Fed chair will oversee a 12-member Federal Open Market Committee that has been remarkably split on how to proceed on interest rate cuts this year. That was evident in the September minutes released on Wednesday. Now, financial market observers are making their call in the Fed race.

“He wants Bessent but will take Hassett,” financial analyst Jim Bianco wrote in a social media post. “The rest get to take selfies in the Oval Office.”