Trump’s Reluctance to Nominate Hassett as Fed Chair Raises Speculation

President Donald Trump has expressed hesitation in nominating Kevin Hassett, the director of the White House National Economic Council, to succeed Jerome Powell as chair of the Federal Reserve. During a recent White House event, Trump praised Hassett's contributions but voiced concerns about losing him from his current role, stating, “If I move him, these Fed guys – certainly the one we have now – they don’t talk much. I would lose you. It’s a serious concern to me.” This reluctance has shifted the spotlight to former Fed Governor Kevin Warsh, who is now considered the front-runner for the position.

The HillTrump Halts Hassett Fed Chair Bid, Warsh Leaps to FrontrunnerAustralian Financial ReviewPoliticoThe Straits TimesHassett plummets in Fed Chair race following Trump’s White House statements

Following Trump's comments, market predictions regarding potential nominees have shifted significantly. Hassett's chances of being named Fed Chair dropped to 18%, while Warsh's odds surged to 60%. Analysts noted that Trump's remarks effectively "catapulted Warsh into pole position" for the nomination, reflecting a broader market sentiment that favors Warsh over Hassett.

Hassett plummets in Fed Chair race following Trump’s White House statementsTrump Halts Hassett Fed Chair Bid, Warsh Leaps to FrontrunnerThe HillDOJ investigation clouds future of Fed chair nominationThe Straits TimesAustralian Financial Review

The nomination process is complicated by ongoing tensions between the Trump administration and the Federal Reserve, particularly due to a Justice Department investigation into Powell's actions. Senator Thom Tillis, a Republican member of the Senate Banking Committee, has vowed to oppose any Fed nominees until the investigation concludes, raising concerns about the central bank's independence. This scrutiny could impact Hassett's candidacy if nominated, as lawmakers are increasingly focused on the political implications of Fed leadership.

PoliticoTrump Halts Hassett Fed Chair Bid, Warsh Leaps to FrontrunnerDOJ investigation clouds future of Fed chair nominationTrump has no immediate plans to dismiss Powell: Prefers to nominate two candidates for Fed chairThe Hill

Treasury Secretary Scott Bessent, who is overseeing the search for a new Fed chair, emphasized that the nominee must be someone who commands respect from both markets and global leaders. He noted that the president's decision is ultimately his prerogative, stating, “Only the president knows” who he will nominate. Meanwhile, Trump has indicated he plans to announce his nominee soon, although he has not confirmed whether it will be Hassett or Warsh.

DOJ investigation clouds future of Fed chair nomination

Hassett's potential nomination has faced criticism, particularly regarding his comments supporting the Justice Department's investigation into Powell. Some economists have labeled these remarks as "inappropriate" for a candidate vying for the Fed chairmanship. Peter Conti-Brown, a Fed historian, stated that Hassett's public comments could disqualify him from consideration, suggesting that he should have remained silent on the matter.

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As the deadline for Powell's term approaches in May 2026, Trump is expected to finalize his nomination soon. The outcome of the ongoing investigation into Powell may also influence the dynamics of the nomination process, potentially complicating the confirmation of any candidate, including Hassett or Warsh. The situation remains fluid, with market observers closely monitoring developments as they unfold.

Trump has no immediate plans to dismiss Powell: Prefers to nominate two candidates for Fed chair