Fed Frontrunner Hassett a 'Credible' Economist, Says Citi's Kaiser

White House National Economic Council Director Kevin Hassett is seen by advisers and allies of President Donald Trump as the frontrunner to be the next Federal Reserve chair, according to people familiar with the matter, as the search for a new central bank leader enters its final weeks.

With Hassett, Trump would have a close ally whom the president knows well and trusts installed at the independent central bank, the people said, speaking on the condition of anonymity. Hassett is seen as someone who would bring the president’s approach to interest-rate cutting to the Fed, which Trump has long wanted to control, some of the people said.

Still, Trump is known to make surprise personnel and policy decisions, meaning a nomination is not final until it’s made public, they said.

White House Press Secretary Karoline Leavitt in a statement said, “nobody actually knows what President Trump will do until he does it. Stay tuned!”

However, Citi Head of US Equity Trading Strategy Stuart Kaiser referred to Hassett as being 'on the credible side of things' from an economic perspective.

He joined Carol Massar and Tim Stenovec on 'Bloomberg Businessweek Daily' to break down the Hassett pick and the state of the markets.

Fed chair and governor picks are historically the most direct way a president can influence the central bank. Trump nominated current Chair Jerome Powell during his first term. He came to regret the decision when Powell didn’t push for lower interest rates at the pace Trump wanted.

Hassett is seen as closely aligned with Trump’s view on the economy, including that interest rates need to be lowered further. He told Fox News on Nov. 20 that he would “be cutting rates right now” if he were the chair of the Fed because “the data suggests that we should.” Hassett has also criticized the central bank for losing control of inflation in the wake of the pandemic.

Treasuries rallied, pushing the 10-year yield below 4% for the first time in a month on news that Hassett is a frontrunner for the post.

The Fed has repeatedly served as a punching bag for Trump, with the president lambasting Powell for being “too late” to cut borrowing costs and publicly musing about firing him. The president has also assailed renovations on the central bank’s campus and the White House is currently engaged in litigation over Trump’s attempted dismissal of Fed Governor Lisa Cook.

That’s put pressure on Treasury Secretary Scott Bessent, who is leading the selection process for the next Fed chair, to carefully balance candidates who are in favor of slashing borrowing costs and have the trust of both the president and financial markets.

After being on hold for most of 2025, the Fed began lowering interest rates this fall, cutting its benchmark rate by 25 basis points in both September and October. But officials have grown increasingly divided over the outlook for inflation and the labor market, likely making a cut at their next meeting in December a close call.

Bessent told CNBC on Tuesday there’s a good chance Trump could announce his Fed chair selection within the next month, before the Dec. 25 Christmas holiday.

Trump himself has teased that he is close to making a selection. Trump on Nov. 18 said, “I think I already know my choice,” without revealing whom he would select as chair. In September, Trump said that Hassett, along with ex-Fed official Kevin Warsh and current central bank governor Christopher Waller, were the top three candidates.

“President Trump saw in the first term how important it was to have people who understand his direction and priorities, especially in key positions like FBI director and Federal Reserve chair,” said Sean Spicer, who served as White House press secretary in Trump’s first term. “I can’t imagine him appointing someone he doesn’t have a strong personal relationship with to succeed Jerome Powell.”

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