Trump Voices Reluctance at Nominating Hassett as Fed Chair

President Donald Trump expressed reluctance toward nominating Kevin Hassett as Federal Reserve chair, casting further doubt over his search for the next head of the central bank.

Trump on Friday said if Hassett were to leave his post as director of the White House National Economic Council, it would deprive the administration of one of its most powerful messengers on the economy. Hassett has been seen as a top contender to succeed Fed Chair Jerome Powell.

“I actually want to keep you where you are, if you want to know the truth,” Trump told Hassett during a White House event. “If I move him, these Fed guys — certainly the one we have now — they don’t talk much. I would lose you. It’s a serious concern to me.”

Analysts immediately speculated that Trump’s remarks made former Fed Governor Kevin Warsh the front-runner for the job.

Krishna Guha, head of central bank strategy at Evercore ISI, said in a note to clients the news would “catapult Warsh into pole position in the race to succeed Powell as Fed chair.”

The dollar rebounded from session lows to trade modestly higher after Trump’s remarks, while stocks turned negative. Prediction markets also responded immediately, raising the odds that Warsh would win the nomination.

Trump’s effort to fill Fed vacancies is, however, facing roadblocks in the Senate, which must confirm the president’s nominees. Senator Thom Tillis, a key Republican on the Banking Committee, vowed to oppose any of the president’s picks until a Justice Department investigation into the Fed is resolved. Other GOP senators have also pushed back on the probe.

The move to subpoena the Fed dramatically escalated the Trump administration’s battle with the institution over its policy decisions. Powell decried the probe as a barely veiled attempt by the White House to undercut the central bank’s independence. Administration officials have defended the inquiry as a necessary step to ensure proper stewardship of tax dollars.

The president didn’t address that controversy in his Friday comments, but indicated his selection process still isn’t settled. He has recently said he plans to announce his nominee for Fed chair in the next few weeks.

“We don’t want to lose him,” Trump said of Hassett. “We’ll see how it all works out.”

Late last year, Hassett was seen by Trump advisers as the frontrunner for the job. But Trump has continued to consider other candidates.

In an interview with Reuters earlier this week, Trump suggested he was considering both Hassett and Warsh for the role, among others.

“The two Kevins are very good,” Trump said. “You have some other good people too.”

BlackRock Inc. executive Rick Rieder was seen at the White House on Thursday. He participated in an interview for the role with the president and senior administration officials, Fox Business reported.

Powell’s term as head of the central bank ends on May 15. The search process is being led by Treasury Secretary Scott Bessent, who Trump has said removed himself from consideration for the role.

Trump’s search for a new Fed chair comes at a delicate time for monetary policymakers, as the US economy is pulling them in opposite directions. Employment showed signs of weakness in 2025, prompting officials to lower rates. Some at the Fed are calling for more cuts to bolster the jobs market.

But inflation also remains stubbornly above the central bank’s 2% and several policymakers say it’s time to hold rates steady to make sure policy puts downward pressure on inflation.

A new Fed chair is expected to enter office seeking additional cuts, in line with Trump’s wishes. But their ability to build consensus on the Fed’s rate-setting committee could prove difficult. That would be further complicated if Powell decides to stay on as a governor after his term as chair ends. The recent DOJ subpoenas have increased speculation that Powell is now prepared to do just that. His underlying term as a governor extends to January 2028.

Bloomberg's Stuart Paul joins to discuss on Bloomberg Intelligence.

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