Hassett Emerges as Top Contender to Replace Jerome Powell as Fed Chair

Kevin Hassett, director of the National Economic Council, is the early frontrunner to replace Jerome Powell as Federal Reserve chief next year, according to sources. Hassett has echoed Trump's criticism of the Fed, saying it is not independent. Trump has blasted Powell for keeping interest rates too high and wants a new Fed chair who will cut rates. Hassett has amplified Trump's instincts on trade, taxes, and the Fed in TV appearances, making him a top contender for the job.

Kevin Hassett, the director of the National Economic Council, has emerged as the early frontrunner to replace Jerome Powell as the Federal Reserve chair next year, according to sources close to the administration. Hassett's rising profile is driven by his echoing of President Trump's criticism of the Fed, particularly its alleged lack of independence. Trump has been vocal in his desire for a new Fed chair who will lower interest rates, and Hassett's views align closely with the president's instincts on trade, taxes, and monetary policy.

Hassett has been vocal in his criticism of the Fed, stating that the central bank has "lost its way" and that the American people "need a reformer to fix" it. He has also questioned the legality of the Fed's renovation project for its headquarters, which has cost over $2.5 billion with a $700 million overrun. Hassett has suggested that the renovation project could be used as a predicate to fire Powell, although he has not explicitly stated that he would support such a move [1].

Hassett's stance has put him at the forefront of the list of potential candidates to replace Powell, who is set to end his term as chair next May. Other contenders include former Fed governor Kevin Warsh, Treasury Secretary Scott Bessent, and Fed governor Christopher Waller. However, Hassett's close relationship with Trump and his alignment with the president's economic views have positioned him as a top contender.

The White House has been increasingly vocal in its criticism of Powell, with Trump repeatedly calling for his resignation and accusing him of keeping interest rates too high. The Fed chair has maintained that he has no intention of resigning, and the Federal Reserve Act does not provide specific language for the removal of the chair for cause [2].

The potential replacement of Powell has significant implications for monetary policy and the economy. Trump has repeatedly called for lower interest rates, and a new Fed chair who shares his views could lead to a more accommodative monetary policy. However, such a shift could also have implications for inflation and the economy's long-term health.

As the formal process to find Powell's successor begins, investors and financial professionals will be closely watching the developments. The appointment of a new Fed chair will have a significant impact on monetary policy and the broader economy, and the choice of Hassett or another candidate could shape the direction of the central bank for years to come.

References:
[1] https://finance.yahoo.com/news/contenders-to-succeed-powell-slam-fed-chair-as-white-house-pressure-intensifies-125946102.html
[2] https://www.investing.com/news/economy-news/trump-adviser-kevin-hasset-among-top-contenders-for-next-fed-chair-wsj-4127422