Next Fed Chair: Two "Kevins" in Battle, with Besent Watching from the Sidelines
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Next Fed Chair: Two "Kevins" in Battle, with Besent Watching from the Sidelines
Kevin Hassett, Director of the National Economic Council, and Kevin Warsh, former member of the Federal Reserve Board, are engaged in a fierce competition for the position of Federal Reserve Chair, while Treasury Secretary Besent is rumored to potentially seek both the Treasury Secretary role and the Fed chairmanship.
Navigating Web3 tides with focused insightsBy Li Xiaoyin, Wall Street Insights
In the high-profile selection under Trump, the race for the next Federal Reserve chair is turning into a dramatic power game.
According to media reports, Kevin Hassett, director of the National Economic Council, and Kevin Warsh, former Fed governor—two "Kevins"—are fiercely competing for this pivotal position.
Insiders cited by the media say Hassett’s momentum is rapidly rising, while Warsh, once an early favorite, is now facing skepticism.
The latest developments indicate that Hassett, as one of Trump’s core economic advisers, has already met with the president at least twice in June to discuss the Fed chair role. Meanwhile, despite Warsh's early frontrunner status, doubts are growing due to his lack of trust within Trump’s inner circle and his hawkish background.
Nick Timiraos, the veteran Fed reporter known as the “New Fed Wire,” also tweeted that Hassett and Warsh are locked in a tight contest for the position.
Meanwhile, Treasury Secretary Benston is rumored to be eyeing both the Treasury post and the Fed chairmanship, with speculation even suggesting Trump once proposed he hold both roles simultaneously.
Hassett: The seasoned insider seemingly shifting stance to align with Trump
The 63-year-old Hassett is an academic economist who worked at the Fed in the 1990s and boasts strong theoretical credentials.
Over the past eight years, he has remained a central figure in Trump’s economic team, having served two stints during Trump’s first term and adaptively adjusted his positions to align with the former president.
Insiders told the media that Hassett recently shifted from expressing disinterest to clearly stating he would accept the chairmanship if nominated.
His public stance has also undergone a noticeable shift. Once declaring his role was to “remind people to respect the Fed’s independence,” he has recently emerged as one of Jerome Powell’s harshest critics, accusing the Fed of making decisions based on partisanship rather than economic data.
In a late-June television interview, Hassett claimed Powell had colluded with Democrats to aid a political rival:
“Powell cut rates before the election to help Harris.”
Yet last autumn, Hassett had offered a favorable assessment of the Fed’s September rate cut, saying policymakers should be judged based on information available at the time, calling the move “very reasonable given the data then.”
Warsh: Elite pedigree striving to rebrand hawkish image
The 55-year-old Warsh, a former Fed governor, comes from elite financial circles, married into the billionaire Ronald Lauder family, and maintains close ties with traditional Republicans like Paul Ryan.
As a former adviser to President Bush, Warsh has been a staunch advocate of free trade over the past decade—a strength that ironically undermines his credibility with Trump.
In recent weeks, Warsh has attempted to reframe his long-standing inflation-focused or “hawkish” monetary policy views.
In multiple speeches and a Fox News interview on Monday, Warsh suggested the Fed could cut rates more aggressively if it collaborates with Benston to reduce its holdings of approximately $6.2 trillion in Treasuries and mortgage-backed securities.
Reports say he plans to visit Washington this month to meet with Benston about the chairmanship, and his longstanding connection with Trump and polished media presence could work in his favor.
Benston: In a delicate position, both adviser and contender
Treasury Secretary Benston occupies a unique role in this chairmanship contest.
Insiders revealed that Trump has expressed to Benston his desire for him to become the next Fed chair, even briefly proposing he serve concurrently as both Treasury Secretary and Fed Chair—though it remains unclear whether this was a serious suggestion.
Benston himself has recommended that Trump consider current Fed governors Christopher Waller and Michelle Bowman as chair candidates. Both were appointed by Trump but are currently seen as long shots.
Analysts suggest Benston’s endorsement may deepen divisions within the Fed, especially since Waller and Bowman recently signaled they might vote in favor of rate cuts at this month’s meeting—diverging from Powell’s position.
Benston’s attitude toward Powell has also taken a dramatic turn.
In April, he called the Fed’s independence a “jewel case to be treasured,” but by late June, he mocked Powell’s cautious rate-cutting approach in front of investors, likening him to “an old man who always walks with his head down after a fall.”
Insiders also say Benston is closely watching whether Powell intends to remain on the Fed Board after his chairmanship ends in January 2028, viewing this as Powell’s final leverage to preserve the Fed’s independence.
Trump’s clear expectation for the next chair: prioritize rate cuts
The conflict between Trump and current Chair Powell is the catalyst behind this contest.
Trump has repeatedly voiced dissatisfaction, arguing the Fed failed to adequately respond to inflation risks posed by his tariff policies and blaming high interest rates for stifling economic growth.
He has explicitly stated he expects the next Fed chair to swiftly initiate rate cuts—a clearer condition than during his first term.
Market analysts warn that such public confrontation could further erode the Fed’s independence, and if the new chair overly accommodates Trump’s push for lower rates, it could fuel market concerns about inflation expectations.
Powell’s term as Fed chair ends in May next year, though his tenure as a Fed Board member extends until January 2028. There is speculation Trump may announce his successor before Powell steps down.
Media reports indicate Trump’s advisers have discussed the possibility of appointing Hassett to a vacant Fed governor seat opening in February next year, after which either he or Warsh could be elevated to chair.
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