Donald Trump has effectively confirmed that he sees Kevin Hassett as the new head of the Federal Reserve after Jerome Powell. And he did it publicly—right at a White House event where Hassett was sitting in the front row.
This statement came amid heightened market nervousness. Investors are closely watching who will determine interest rates, liquidity, and future inflation policy when Powell’s term ends in spring 2026.
Trump narrows the list to one name
Trump started dropping hints as early as the morning during a Cabinet meeting. He said that:
- the initial list had about ten candidates
- then the number of contenders was reduced to five
- now there is ‘one person’ left
According to sources, that one remaining candidate is Kevin. He heads the White House National Economic Council and regularly appears in the media, commenting on White House policy.
In the past, he already led the Council of Economic Advisers, where he worked on labor market models, macro assessments, and forecasts—but he has never led the Fed itself. Now the expectations are completely different: the market is waiting for his decision on the US key interest rate.
The selection process goes off the rails
Until recently, it seemed that Trump’s team was following the standard procedure: several rounds of interviews, competency assessments, comparing candidates’ positions. Meetings with Vice President JD Vance were supposed to take place this week.
But after Trump’s statement, the interviews were suddenly canceled. Officially—due to Vance’s schedule. But in reality, it looked as if the president decided not to wait for any final list and chose the future head of the central bank himself.
Even more interesting, the White House itself released a dry statement a few hours later: ‘Until the official announcement, this is just speculation.’
Formally—yes. But according to people familiar with the process, Hassett made it to the final round for a reason, and Trump is ready to bet on him.
Personal history and political commitments
Hassett holds a PhD in economics and has long been part of Trump’s inner circle. He defended the White House’s protectionist policies, supported tariffs, and was one of the advocates for more aggressive monetary easing.
At the same time, Hassett maintained a reputation as a calmer and more diplomatic official who avoids direct conflicts—unlike Trump, who openly attacked Powell for almost his entire first term.
Trump does not hide that he regrets appointing Powell. Former Treasury Secretary Steven Mnuchin, whom he blames for the ‘mistake,’ was long a target of the president’s frustration.
This story now hangs over Hassett as well: if the Fed’s position changes, he will have to keep his distance to at least maintain the appearance of independence.
How markets are reacting to a possible Fed leadership change
Bond markets took the mention of Hassett’s name as a signal for lower yields. The yield on ten-year Treasuries briefly fell below 4%.
The reason is simple: Hassett has already spoken about the need to accelerate monetary easing. Trump does not hide this either; he wants to see lower rates much faster than is happening now.
However, analysts warn: rapid rate cuts under strong political pressure could lead to conflict within the Fed. The Open Market Committee will resist, especially if inflation accelerates again.
Equally important, if Hassett becomes Fed chair, he will receive a 14-year term as a member of the Board of Governors, not just a four-year term as chair. This makes his appointment a strategic choice for decades ahead.
What is behind this battle
The choice of Fed chair is not just the appointment of another official. This is about a person who will:
- control the cost of credit in the US
- influence global liquidity
- determine the market’s reaction to inflation spikes
- balance between political pressure from the White House and the central bank’s independence
Now, Trump has essentially taken the process under personal control. And Hassett is the person he considers ideal. But as sources close to the White House note, Trump is capable of changing decisions quickly.
If there is pressure from the team or the market, the course may change. However, at the moment, the likelihood of Powell being replaced by Hassett is the highest it has been during the entire discussion period.
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