As President Donald Trump prepares to announce his selection for the next chair of the Federal Reserve, speculation intensifies around National Economic Council Director Kevin Hassett being the frontrunner for the position. Currently, Hassett is embroiled in a five-person race to succeed Jerome Powell, whose term expires in May. While Trump has indicated he knows who his choice will be, he has kept the details under wraps, promising an announcement in the near future.
During a recent appearance on CBS’ “Face the Nation,” Hassett referred to his potential candidacy as an honor, emphasizing the positive reaction from markets since reports of him emerging as a leading candidate. He suggested that if he were chosen, Trump would pick someone primed to help Americans manage finance more effectively, specifically referencing lower car loan rates and easier access to mortgages. Market predictions have also reflected confidence in Hassett, with various platforms placing his odds of becoming chair between 63% and 79%.
The next Fed chair will inherit a central bank that is currently divided. Officials are split between those advocating for additional interest rate cuts to safeguard the labor market and others who maintain concerns about persistent inflation that could worsen with further monetary easing. Trader expectations for the upcoming rate decision on December 10 show a significant probability for rate cuts.
Despite differing opinions on monetary policy, Treasury Secretary Scott Bessent has indicated a desire to rethink the Fed’s mission, arguing that it has become overly complicated since the financial crisis. He suggests that the Fed should shift back to a supportive, background role focused on the long-term well-being of the economy. Bessent specifically mentioned the influence of regional presidents, arguing their public speeches can sway markets unnecessarily, and called for a more focused approach to monetary policymaking.
The call for reform resonates with other economic leaders, including Mohamed El-Erian, who asserted the need for the Fed to adopt a broader, more visionary perspective rather than engaging in day-to-day market commentary. With substantial changes proposed ahead, the role of the next Fed chair will extend well beyond interest rates, potentially shaping the institution’s future in a critical economic landscape for the U.S. and beyond.