White House Signals Kevin Hassett May Not Be Fed Chair Pick

Source: Coindoo Original Title: White House Signals Kevin Hassett May Not Be Fed Chair Pick Original Link: The race to lead the Federal Reserve is taking an unexpected turn, with signals from the White House suggesting that one of the early favorites may never leave his current post.

Kevin Hassett’s path to the Fed chair appears to be narrowing. Rather than preparing for a nomination, the White House economic adviser has hinted that President Donald Trump may prefer to keep him inside the West Wing. Hassett said discussions with Trump have focused on where he can be most effective – and that a final decision has yet to be made.

Key Takeaways

• Kevin Hassett’s chances of becoming Fed chair are fading as Trump signals he wants him to stay in the White House.
• The Fed leadership race is reshuffling, with attention shifting to other candidates, including a BlackRock executive.
• Political pressure and a DOJ probe have heightened concerns about Fed independence ahead of the decision.

Trump has already publicly leaned in that direction, telling aides last week that he would rather Hassett stay put. If that view hardens, Hassett would effectively be removed from consideration to replace Jerome Powell, whose term expires on May 15.

The field reshuffles

For months, Hassett had been viewed as one of the leading contenders. With his status now uncertain, attention is shifting to other names in the mix, including Fed Governor Christopher Waller, former Fed official Kevin Warsh, and BlackRock executive Rick Rieder.

Rieder, in particular, has gained momentum in recent weeks, according to people familiar with the discussions. Some insiders believe his market experience could make him a smoother fit for Senate confirmation at a time when scrutiny is intensifying.

Politics enters the Fed debate

That scrutiny has been sharpened by a criminal investigation linked to renovations at the Federal Reserve’s headquarters. Powell has argued the probe is being used to pressure the central bank into cutting interest rates, a claim that has alarmed lawmakers concerned about political interference.

Several senators have warned that the controversy will raise the bar for any nominee put forward by the White House, turning the confirmation process into a more contentious affair than usual.

Markets weigh independence risks

The situation has reignited broader questions about the Fed’s autonomy. Trump’s repeated calls for lower rates, combined with the investigation, briefly unsettled investors. Treasury Secretary Scott Bessent reportedly cautioned the president about potential market fallout, though he later pointed to stable Treasury bond auctions as evidence that investors remain calm.

Bond yields dipped earlier in the week before leveling off, suggesting markets are watching closely but not yet reacting aggressively.

Waiting on a decision

Bessent, who is overseeing the search and has ruled himself out as a candidate, said he expects the process to move forward and is confident the Senate will ultimately confirm Trump’s choice. Hassett, meanwhile, struck a conciliatory tone, saying he would respect the president’s decision and that remaining in the White House could be the best place for him right now.

As Powell’s departure date approaches, the Fed succession story is becoming less about a clear favorite – and more about how politics, markets, and institutional independence collide in Washington.