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Trump eyes Fed shake-up: Hassett tipped as Powell’s potential successor

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Trump eyes Fed shake-up: Hassett tipped as Powell’s potential successor

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Kevin Hassett, a White House economic adviser known for aligning closely with Donald Trump, has reportedly become a serious contender to replace Jerome Powell as Chair of the Federal Reserve. It appears the former president's patience with Powell has run out well before Powell’s term officially ends.

Hassett is no stranger to this power game. He has already had two rounds of discussions with Trump about taking over the monetary reins. According to analysts, he is now leading the race, edging out former Fed governor Kevin Warsh, whose independent streak may be too bold for such a politically sensitive post.

Powell, ironically appointed by Trump back in 2017, has clearly fallen out of favor. In Trump’s view, interest rate cuts came too slowly, the Fed’s inflation caution bordered on annoying, and the idea of central bank independence sounded almost offensive.

Now markets are left wondering: what or rather who lies ahead for the Fed post-2026? Notably, there are rumors that Trump once considered offering the Fed chair role to Treasury Secretary Scott Bessent. Trust is now measured in basis points.

So far, the Fed has taken a moderate path by cutting rates by 1% in 2024 and signaling a slower pace in 2025 to avoid reigniting inflation. However, if the pressure from the White House escalates, even this measured approach may appear overly academic.

As things stand, Powell remains in place. However, the chairs around the table are already being rearranged. In this game, expertise in monetary policy may take a back seat to one crucial skill, namely, the ability to say, “Yes, Mr. President,” ideally, before the next Fed meeting rolls around.

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