Kevin Hassett, currently directing the National Economic Council, has surged ahead as the prime contender for the Federal Reserve chairmanship, with former Fed governor Kevin Warsh also among top candidates. Treasury Secretary Scott Bessent actively participates in the selection process and might himself secure the position if alternative choices prove unconvincing. Meanwhile, Fed Governor Christopher Waller remains viewed as an unexpected dark horse candidate.

President Trump has repeatedly expressed dissatisfaction with incumbent Chair Jerome Powell, blaming restrictive interest rates for stifling economic growth and demanding rate reductions. Trump explicitly seeks a successor who will implement swift monetary easing, signaling stronger conditions than during his first term. These statements amplify political undertones in the selection process, raising investor concerns about threats to Fed independence—a cornerstone for inflation control and dollar stability.

Hassett recently echoed Trump's critiques, questioning the central bank's nonpartisan credibility. "It raises legitimate concerns about their impartiality and genuine independence," he remarked, referencing the Fed's pre-election rate cut and subsequent inaction despite tariff-related inflation risks.

Once considered a moderate right-leaning economist, Hassett has spent the past decade embedding himself in Trump's inner circle. His approach at NEC contrasts sharply with predecessor Gary Cohn, who unsuccessfully resisted Trump's tariff impulses. Hassett fully embraces MAGA philosophy, frequently defending Trump's stances on trade, taxation, inflation, and Fed policy across television appearances. Stephen Myrow of Beacon Policy Advisers observes, "Those enduring in Trump's orbit don't serve ideological doctrines—they serve Trump personally."

This loyalty raises trillion-dollar questions about how such allegiance might influence a role traditionally insulated from executive priorities. Economists warn that perceived White House control could destabilize Treasury markets, especially amid Trump's threats to fire Powell and ongoing trade war tensions.

Treasury Secretary Bessent confirmed the formal selection process launch, collaborating with White House Chief of Staff Susie Wiles—a key architect of Trump's personnel decisions focused on maintaining economic strength through midterm elections. Trump personally engages deeply in the vetting, with advisors anticipating rapid interviews given his decisive tendencies. While privately enthusiastic about the role, Hassett publicly maintains discretion. When questioned about Bessent's candidacy, Trump called him "an option" and praised his performance.

White House spokesperson Kush Desai stated, "With Biden's inflation crisis resolved, President Trump expects monetary policy to align with his growth agenda. He will nominate the most qualified individual to serve Americans." Hassett's daily presidential access provides an advantage over Warsh, who divides time between California's Hoover Institution and New York. Trump previously interviewed Warsh in 2017 but deemed him excessively hawkish and youthful compared to Powell.

Hassett chaired the Council of Economic Advisers during Trump's first term, building on prior Fed experience and research leadership at the American Enterprise Institute. A prolific tax policy expert, he co-authored "Dow 36,000"—a bullish market prediction published shortly before the dot-com crash. The index required over two decades to reach his projected level.

Post-administration, Hassett advised Jared Kushner's Affinity Partners fund while regularly consulting Trump on economic matters. An associate notes both share grievances over perceived disrespect—a trait evident in Trump's escalating criticism of Powell. Dubbed "Too Late" for delayed rate cuts, Powell faces intensified attacks despite having reduced rates by one percentage point in late 2024. Current Fed officials cite robust growth, strong employment, and insufficient evidence of tariff-driven inflation to justify further easing.

June data hinted at businesses passing trade-related costs to consumers, solidifying expectations for steady rates at the July 29-30 meeting, though markets still price in one or two cuts this year. Hassett joined Trump's "behind the curve" critique, noting the Fed lags peer central banks. He also joined GOP lawmakers scrutinizing the Fed's building renovation costs—Trump's latest pretext for attacking Powell.

The administration may pressure Powell to resign completely rather than remain as a governor after his chair term expires in May. Bessent emphasized, "Typically, chairs relinquish governor roles upon departure. An ex-chair lingering on the board would create market confusion—we can't have shadow leadership scenarios."