Kevin Hassett, the White House’s top economic adviser, is emerging as a leading contender to become the next chair of the Federal Reserve, according to people who have discussed the matter with White House officials, as President Donald Trump weighs installing a more closely aligned central bank chief.
The selection process remains fluid, and it isn’t a sure thing that Hassett will get the nod. But Hassett, who leads the National Economic Council and served as a key economic adviser during Trump’s first term, has advantages that others lack, said people familiar with the process.
Hassett, 63, is among at least four Fed chair contenders who Trump believes will be more responsive to his push for lower interest rates than current Federal Reserve Chair Jerome H. Powell. When asked by reporters Friday if he would try to fire Powell, Trump said no. But he said that Powell was doing a “terrible job” and that interest rates should be three percentage points lower.
Hassett has a close relationship with Trump and has worked for him for nearly a decade, making him one of the few advisers who have endeared themselves to the president while staying in his good graces. After holding two roles in the first Trump administration, he joined a private-equity firm started by Trump’s son-in-law Jared Kushner and later advised Trump on economic policy during the 2024 presidential campaign.
That history, combined with Hassett’s academic credentials and deep ties in conservative economic circles, has helped elevate his standing among Trump allies pressing for change at the Fed, according to two people who spoke on the condition of anonymity to disclose private conversations. He is also seen as a disciplined and effective media surrogate, a trait Trump has long valued in his top appointees.
The market is waking up to the fact that Hassett has some significant advantages in the race to succeed Powell as Fed chair, said Krishna Guha of Evercore ISI.
“Hassett’s main challenge would be to prove to markets that, though a Trump loyalist, he would be sufficiently independent of the president as Fed chair to maintain Fed credibility,” Guha said.
Whoever Trump taps to lead the central bank would face a complex balancing act: managing the monetary policy goals of an institution designed to operate independently, while also navigating the demands of a president unafraid to publicly pressure the Fed for lower interest rates. The next chair would be likely to come under intense scrutiny from financial markets and within the Fed itself, as officials gauge whether political loyalty might come at the expense of the central bank’s credibility in fighting inflation.
“While familiaritywith Trump might be an advantage in the race to get the job, it isn’t necessarily an advantage in the task of doing the job,” said Jon Hilsenrath, a visiting scholar in Duke University’s economics department who focuses on central bank issues.
Hassett faces competition from other contenders: former Fed governor Kevin Warsh, Treasury Secretary Scott Bessent and Fed governor Christopher Waller, each with distinct strengths.
Warsh has deep ties to GOP economic circles and to Trump, who once said he wished he had nominated Warsh to lead the central bank instead of Powell.
Meanwhile, Bessent is seen as both a trusted policy adviser and a key link to Wall Street.
Waller, a sitting Fed official, offers insider knowledge of the central bank’s thinking. Waller has signaled openness to a rate cut this month, setting him apart from most of the 19 people who have a say in Fed policymaking and favor waiting to see how Trump’s agenda affects the economy before adjusting borrowing costs. Waller has stressed his view is not political.
A White House spokesperson didn’t immediately respond to a request for comment.
Hassett, who previously chaired the Council of Economic Advisers, is a conservative economist who taught at Columbia University. He has worked at right-of-center think tanks, including the American Enterprise Institute, and served as an economist at the Fed early in his career. He has argued publicly for lower interest rates and echoed Trump’s view that the Fed should do more to support growth.
An expert on the link between taxation and investment, he also played a key role providing an economic justification for Trump’s massive tax-and-spending bill that became law this month.
Tomas Philipson, a chaired professor emeritus at the University of Chicago, said Hassett has the ability to translate complex economic research into language the public can understand.
“Kevin is the perfect translator of that stuff,” said Philipson, who was a friend of Hassett in graduate school in the 1990s. Philipson also succeeded Hassett as acting chair of the Council of Economic Advisers at the end of Trump’s first term.
Bessent also has the president’s trust and is a strong candidate, but if Trump wants to nominate the next Fed chair early, it could be too soon for Bessent, who remains heavily engaged in reshaping trade policy, Guha said.
Meanwhile, Warsh has strong central bank credentials and has the telegenic qualities Trump often looks for in senior officials, Guha said. Warsh is also viewed in markets as independent, which helps with Fed credibility. But his main challenge is that the president may worry he is more of a mainstream Republican than personal Trump loyalist and could be too hawkish for the president about the central bank’s balance sheet, having favored a faster drawdown of the central bank’s bond holdings, known as quantitative tightening, Guha added.
Hassett initially did not express interest in the Fed job, people familiar with his thinking have said. However, he has signaled since that he would accept the position if it is offered.
Fed watchers expect that the president could announce his decision as early as this month, with Powell’s successor potentially joining the Fed’s seven-member board in early 2026 to fill a vacancy by the expected departure of Fed governor Adriana Kugler. Powell’s term as chairman doesn’t expire until May, and he can remain on the Fed board until 2028.
In recent months, Hassett has emerged as one of the Fed’s toughest critics from within the Trump administration, accusing Powell of letting politics cloud the central bank’s judgment.
In a Friday interview on Fox Business, Hassett criticized the Fed for holding rates steady, saying they ought to be at least 1.5 percentage points lower – language that echoed Trump’s. He also repeated the administration’s criticism of an expensive and massive overhaul of the Fed’s headquarter buildings in Washington, calling the project “an absolute debacle.”
The Fed has defended the roughly $2.5 billion project, which has been plagued by pandemic-triggered cost overruns, as necessary to modernize decade-old structures that required complete gut jobs. Powell has asked the Fed’s internal watchdog to conduct another review the project, including costs, according to a person familiar with the matter.
It’s a big shift for Hassett, who had previously defended the independence of the Fed, as well as its policy decisions. Although he now criticizes a jumbo-size rate cut that the central bank made in September as politically timed to help Vice President Kamala Harris’s election bid, he told the Financial Times last fall that the lower rate made sense based on the slowing labor market data the Fed had at the time.
