According to the latest market news, US President Trump will soon begin the final round of interviews for the position of Federal Reserve Chairman, with White House economic advisor Kevin Hassett competing for the job against three other candidates .
Shortly after the news broke, Trump also spoke about his nominee for Federal Reserve chairman. "We'll be considering a few different people, but I'm very clear about who I want," he said on Air Force One on Tuesday.
This indicates that the final selection of the Federal Reserve Chair is not yet "set in stone," and whether Hassett will ultimately win the position remains uncertain.
On November 30, Trump stated that he had chosen his successor as the next Federal Reserve Chairman and would announce the decision soon. He then stated on December 2 that he planned to announce the nominee in early 2026. The market widely expects Hassett, a close confidant of Trump and a supporter of interest rate cuts, to be the most likely candidate for the next Fed chairman.
Three senior U.S. government officials recently stated that President Trump and Treasury Secretary Bessen are scheduled to meet with former Federal Reserve Governor Kevin Warsh on Wednesday .
According to officials, Bessant has submitted a shortlist of four candidates to the White House, including Hassett and Warsh . The other two are Federal Reserve Governors Waller, Bowman, and BlackRock . Among the nominees are executives like Rick Reed.
Trump and Bessant are expected to have at least one more interview next week before announcing their final decision in early January. White House Chief of Staff Susie Wiles may also attend this interview. The president's nominee still needs Senate approval.
Hassett remains the frontrunner
Officials also said that despite concerns among some Wall Street investors that Hassett's close relationship with the president and the possibility of implementing overly aggressive interest rate cuts, Hassett, currently the director of the White House National Economic Council, remains the frontrunner to succeed Powell in May next year .
Sources say that if Hassett ultimately becomes the Federal Reserve Chairman, Bessett may temporarily serve as the Director of the National Economic Council while retaining his position as Treasury Secretary.
Officials also raised the possibility of Hassett serving as Federal Reserve Chairman for a short period . Sources said Hassett himself proposed to Bessett that he succeed Powell on the Federal Reserve Board of Governors, a position that runs until January 2028. This arrangement leaves room for future personnel changes at the Fed.
However, Powell has not yet decided whether he will remain a Federal Reserve governor after his term as chairman ends.
Trump has repeatedly expressed his desire for Bessett to become Federal Reserve Chair, but the Treasury Secretary has made it clear that he has no intention of taking the position. However, if Hassett were to temporarily head the Fed, Bessett could potentially succeed him as Fed Chair later in Trump's second term.
The term of office for the Federal Reserve Chair is four years, and they can be reappointed. In recent years, almost no Federal Reserve Chairs have served shorter than four years, and many have served multiple consecutive terms.
Bond market investors are worried
Hassett's leading position in the race for Federal Reserve chairman has alarmed some bond investors, who have told the Treasury Department they fear he might cut interest rates recklessly. They believe this could trigger sustained high inflation . Inflation could destabilize the $30 trillion Treasury bond market.
In recent days, Hassett has tried to emphasize the importance of the Federal Reserve's independence. Speaking at an event on Tuesday, he said that while he believes there is still room for further rate cuts, the Fed chair's "most important job" is to "focus on economic data and avoid becoming part of politics."
Meanwhile, US President Trump said on Tuesday that he would use whether the new Federal Reserve chairman would immediately cut interest rates as a key criterion for evaluating his performance. When asked whether "rapid rate cuts would be a litmus test for the Fed chairman he chooses," he gave an affirmative answer.
The market widely expects the Federal Reserve to announce a 25-basis-point rate cut on Wednesday, marking the central bank's third consecutive rate cut. If implemented, this cut would lower the target range for the federal funds rate to a three-year low of 3.5% to 3.75%, although Trump has previously called for reducing U.S. borrowing costs to 1%.
(Article source: CLS)
