Washington, D.C., December 2, 2025 – President Donald Trump has made his choice for the next Federal Reserve chair, but he’s keeping the nation in suspense. Amid a brewing overhaul at the central bank, White House economic adviser Kevin Hassett has surged ahead as the clear frontrunner, according to multiple reports and insiders close to the process. With Jerome Powell’s term expiring in May 2026, the selection could redefine monetary policy just as Trump’s aggressive economic agenda takes shape.
The buzz intensified over the weekend when Trump, aboard Air Force One, confirmed to reporters that he’d decided on a successor but wouldn’t spill the details yet. “I know who I am going to pick, yeah,” he said, adding that an announcement could come soon. That cryptic tease aligned with a Bloomberg report last week naming Hassett as the top contender in a field narrowed to five, a development that sent prediction markets into overdrive—Kalshi now pegs his odds at 80%. Treasury Secretary Scott Bessent, overseeing the search, hinted at a pre-Christmas reveal, telling CNBC there’s a “very good chance” Trump will name his pick by then.
This isn’t just insider baseball—it’s a high-stakes pivot for the world’s most powerful economy. The Fed chair wields immense influence over interest rates, inflation, and growth, and Trump’s pick signals his intent to bend the institution toward his vision of rapid rate cuts and deregulation. Hassett, a longtime Trump ally, fits that mold perfectly, but his elevation raises thorny questions about the central bank’s vaunted independence.
Who Is Kevin Hassett, and Why Him?
Hassett, 63, isn’t a central banker by trade but a seasoned economist with deep ties to Republican policy circles. He served as Trump’s top economic adviser during his first term, chairing the Council of Economic Advisers from 2017 to 2019, where he championed tax cuts and downplayed trade war risks. Now directing the National Economic Council, he’s been a vocal critic of Powell’s cautious approach to rate reductions, arguing the Fed has overcorrected on inflation and starved growth.
In a CBS “Face the Nation” interview Sunday, Hassett played coy but enthusiastic: “I’m really honored to be amongst a group of really great candidates.” He highlighted market optimism around his potential nod, suggesting it could usher in “cheaper car loans and easier access to mortgages at lower rates.” That’s music to Trump’s ears—the president has hammered Powell as “Too Late” on social media and in speeches, demanding swifter cuts to fuel his tariff-heavy agenda.
Hassett’s resume includes stints at the American Enterprise Institute and authorship of books like “Dow 36,000,” a pre-2008 bull-market tome that drew mockery when markets tanked. Critics point to his outsider status as a liability—he lacks the Fed’s insider jargon or relationships with the Federal Open Market Committee (FOMC) governors who vote on rates. But proponents, including Trump allies, see that as a feature, not a bug: a fresh voice untainted by the “deep state” bureaucracy Trump despises.
The Shortlist: A Mix of Insiders and Loyalists
Bessent’s vetting whittled nearly a dozen names to five, blending Fed veterans with Trump confidants:
- Kevin Warsh: Former Fed governor and another Trump favorite from his first term. A hawk on inflation but open to cuts; betting markets give him just 13% odds.
- Christopher Waller: Current Fed governor appointed by Trump in 2020. Respected for pragmatic rate views; could bridge divides but lacks Hassett’s political firepower.
- Michelle Bowman: Fed vice chair for supervision, a Trump appointee focused on banking rules. She’s advocated for measured cuts but might resist overt White House meddling.
- Rick Rieder: BlackRock’s fixed-income chief, a Wall Street heavyweight with ties to Bessent. His market savvy appeals to stability hawks.
Interviews wrapped last week, with finalists slated to meet White House Chief of Staff Susie Wiles and Vice President JD Vance. Senate confirmation looms as the final hurdle—Republicans hold a slim majority, but moderates could balk at a perceived puppet.
Expert Takes: Cheers, Jeers, and Market Jitters
Wall Street’s reaction has been muted but telling. Stocks dipped Monday—Dow down 250 points—on mixed ISM manufacturing data and Bitcoin’s 7% slide below $85,000, but Fed speculation added a layer of intrigue. Prediction markets like Kalshi and Polymarket surged Hassett’s odds post-Bloomberg, reflecting bets on looser policy.
Economists are split. Neil Dutta of Renaissance Macro Research warned Hassett might struggle to unify the FOMC, especially with a “hawkish tilt” in 2026 from rotating regional presidents favoring steady rates to tame inflation. “He looks like the one most easily bullied by Trump,” Dutta told Bloomberg, contrasting him with the more independent Bessent. David Beckworth of the Mercatus Center prefers Waller for his consensus-building chops: “Hassett or Warsh—they’re outsiders who’ve been critical. Leading means herding cats you’ve been clawing at.”
On X, the chatter is bullish for risk assets. One trader posted: “Hassett’s low-rate stance is a tailwind for equities and BTC—cheaper credit means higher valuations.” Axios amplified concerns over independence: “Hassett would have closer ties to the sitting president than any Fed chair in modern times.” Mohamed El-Erian of Allianz cautioned the Fed’s woes run deeper than a chair swap, urging supply-side fixes beyond rate tinkering.
Democrats, meanwhile, decry the process as politicized. Senate Banking Chair Sherrod Brown (D-Ohio) has vowed scrutiny, citing Trump’s past threats to fire Powell and ongoing litigation over dismissing Governor Lisa Cook on dubious fraud claims. The Supreme Court hears that case in January, adding fuel to fears of a weaponized central bank.
What It Means for Americans: From Wallets to Wall Street
For everyday folks, this isn’t abstract—it’s about mortgages, car loans, and grocery bills. Hassett’s dovish bent could accelerate the Fed’s recent cuts (25 basis points in September and October), easing borrowing costs amid 3.2% inflation. Homebuyers in swing states like Pennsylvania might cheer lower 30-year rates dipping toward 6%, but businesses fretting tariffs could face a double whammy if cuts spark imported inflation.
Broader ripples hit tech and crypto: Nvidia’s $2 billion Synopsys stake at $414/share signals AI bets thriving on cheap capital. Bitcoin’s volatility underscores the stakes—a pro-cut chair could pour liquidity into digital assets, per X analysts. Yet, if Senate pushback stalls the pick, uncertainty could spike volatility, echoing 2018’s rate-hike tantrums.
Politically, it’s Trump’s boldest remaking of institutions yet. Unlike Biden’s reappointment of Powell for stability, Trump’s move tests the 1913 Fed Act’s firewall against executive overreach. As one X post quipped, “Regime change at the Fed? More like loyalty test.”
In this inverted pyramid of power, the summit is Hassett’s to claim—or lose. With interviews done and Vance’s input pending, the announcement could drop any day, reshaping everything from your 401(k) to global trade. Trump’s silence only heightens the drama, but one thing’s clear: The Fed’s next era will bear his unmistakable stamp.
By Mark Smith
Mark Smith covers economic policy and Washington insiders for [Your News Site]. Reach him at mark.smith@newsite.com.
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