Kevin Hassett's chances at becoming the next Federal Reserve chair, once deemed highly probable, are facing challenges from influential figures close to President Donald Trump, according to sources. Concerns are raised over Hassett's perceived proximity to the president, which ironically positioned him as a frontrunner against the current chair, Jerome Powell
This resistance may explain the cancellation of interviews in early December, which were only later rescheduled for candidates like Warsh. Trump recently surprised investors by placing former Fed Governor Kevin Warsh alongside Hassett as top candidates, causing Hassett's prediction market odds to drop.
"I think the two Kevins are great," commented Trump, despite changes in their Kalshi prediction market odds, with Hassett maintaining a slight lead of 51% over Warsh's rising 44%.
The pushback appears more like support for Warsh rather than direct criticism of Hassett. At a recent JPMorgan event, CEO Jamie Dimon spoke positively of both candidates but seemed to highlight Warsh. Bloomberg News previously identified Hassett as the front-runner to succeed Powell, whose term expires in May.
However, sources indicate a growing apprehension that financial markets might react negatively if Hassett is perceived to be too aligned with Trump, potentially driving long-term yields higher should inflation fears emerge. To address these concerns, Hassett emphasized the importance of Fed independence in a CBS News interview this past weekend.
"The president has strong views, but the Fed's role is to be independent," said Hassett on CBS's "Face the Nation," underscoring that the president's opinion would not be weighted as a voting mandate but considered if data-supported.