One of Trump’s picks for Fed chair, Kevin Hassett, said rate cut decisions are down to the Fed board and won’t be swayed by US President Donald Trump.
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Kevin Hassett, one of the frontrunners to replace the current chair of the US Federal Reserve, has downplayed concerns that US President Donald Trump could sway the Fed, asserting that Trump’s views will hold “no weight” on agency decisions.
With an announcement of the new Fed chair expected in mid-January, some hold that Trump is looking to spread his influence across the agency by replacing the majority of people in charge at the FOMC.
Speaking with CBS News’ Face the Nation on Sunday, Hassett that the Fed’s role is to remain “independent” and let the 12 members of the Federal Market Committee have the final say.
“No, no, he would have no weight. It’s just his opinion matters if it’s good, you know, if it’s based on data,” he said, adding:
“And then if you go to the committee and you say, well, the president made this argument and that’s a really sound argument, I think, what do you think? If they reject it, then they’ll vote in a different way.”
Race for fed chair may be down to ‘two Kevins’
On Friday, Trump indicated the race for the next Fed chair is being led by two out of — former Fed governor Kevin Warsh and Hassett.
In an with The Wall Street Journal on Friday, Trump said Warsh was at the top of his list.
“Yes, I think he is,” Trump said, adding, “I think you have Kevin and Kevin. They’re both — I think the two Kevins are great,” he said.
At the start of this month, odds on prediction markets such as Kalshi and Polymarket had of becoming the next Fed chair; however, the odds have now dropped significantly following Trump’s latest comments.
At the time of writing, Hassett still leads on Kalshi with odds of 50%, with Warsh in second at 39%.
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During the WSJ interview, Trump also stated that the next Fed chair should consult with him for advice on setting interest rates.
“Typically, that’s not done anymore. It used to be done routinely. It should be done,” he said.
“I don’t think he should do exactly what we say. But certainly we’re — I’m a smart voice and should be listened to,” Trump added.
Crypto market flat despite Fed cutting rates
Last Wednesday, the Fed by 25 basis points to a target range of 3.5% to 3.75%; however, it hasn’t been a boon for crypto markets, with prices remaining flat.
Comments from current Fed chair Jerome Powell suggest that while the Fed isn’t being hawkish, it’s remaining cautious.
“In the near term, risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation. There is no risk-free path for policy,” Powell at the Wednesday FOMC meeting.
With the next chair, Trump has indicated he wants further interest rate cuts in 2026, which could spur bullish action in crypto markets.
“He thinks you have to lower interest rates,” Trump said of Warsh while speaking to the WSJ.
“And so does everybody else that I’ve talked to,” he added.
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