Trump to hold "final interview for Fed Chair," Hassett not yet a sure bet
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Trump to hold "final interview for Fed Chair," Hassett not yet a sure bet
Is Besent still likely to take over later?
Navigating Web3 tides with focused insightsBy Long Yue
Source: Wall Street Insight
The selection process for the next Federal Reserve chair is entering its final stage. Although White House National Economic Council Director Hassett currently holds a leading position, Trump's decision to initiate a final round of interviews indicates the ultimate choice is far from "set in stone."
Today, according to three senior U.S. government officials cited by the Financial Times, Trump and Treasury Secretary Bessent plan to meet with former Fed Governor Warsh this Wednesday. This move marks the official start of the final round of interviews to find a successor to current Chair Powell.
This latest development suggests that Hassett's nomination is not guaranteed. Besides Hassett and Warsh, the shortlist also includes other finalists such as Fed Governors Waller and Bowman, as well as BlackRock executive Rick Rieder. The final decision is expected to be announced in early January next year.
The core implication of this personnel shift lies in the future direction of monetary policy. Some Wall Street investors have expressed concerns, arguing that Hassett, due to his close ties with the president, might pursue overly aggressive rate cuts, potentially exposing markets to risks.
Hassett leads, but tenure may be uncertain
In recent weeks, Hassett has emerged as the frontrunner to succeed Powell. However, officials within the Trump administration have proposed the idea of appointing Hassett to a shorter-than-usual term as Fed chair. The standard term for a Fed chair is four years, renewable.
Two other informed sources said Hassett himself had suggested to Bessent that he take over Powell’s seat on the Fed Board, which expires in January 2028. Such an arrangement offers flexibility for future personnel planning.
Bessent could still take over the Fed
Treasury Secretary Bessent plays a key role in this selection process. Officials say he submitted to the White House a list of four candidates, including both Hassett and Warsh. Although Trump has repeatedly stated publicly that he wants Bessent to become Fed chair, Bessent himself has indicated he is not interested in the position.
However, if Hassett serves only a shortened term, it could pave the way for Bessent to assume leadership of the Fed later during Trump’s second term. This potential arrangement hints at longer-term strategic considerations behind the current selection process.
Market concerns and Hassett's response
Hassett’s leading position has already triggered unease among some bond investors. Reports indicate these investors have voiced concerns to the Treasury, fearing that Hassett might push for aggressive rate cuts. They argue that if such moves lead to persistently high inflation, it could destabilize the $30 trillion U.S. Treasury market.
To ease market concerns, Hassett has recently sought to emphasize the importance of central bank independence. At an event on Tuesday, he stated that while he believes further rate cuts are possible, the Fed chair’s “most important job” is to “focus on economic data and stay out of politics.”
The entire selection process unfolds against the backdrop of Trump’s long-standing criticism of current Chair Powell. Over the past year, Trump has consistently attacked Powell for failing to lower borrowing costs faster and by larger margins. Markets widely expect the Fed to announce a 25-basis-point rate cut this Wednesday, bringing the federal funds rate target range down to 3.5%–3.75%, its lowest level in three years.
Even so, Trump has publicly called for U.S. borrowing costs to be reduced to 1%. For any new chair, balancing presidential expectations with the need to maintain central bank independence will be a major challenge.
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