Hassett says Trump may be right to keep him out as Fed chair

WASHINGTON – White House economic adviser Kevin Hassett said US President Donald Trump may well keep him in his current job, which would eliminate him from contention for the next Federal Reserve chair.

“From the beginning, he and I have talked about whether it’s better for me to be here in the West Wing or over at the Fed,” Mr Hassett said on Fox News’ The Sunday Briefing. “I don’t think he’s made a final call on that.”

Mr Trump expressed

reluctance last week about nominating Mr Hassett

as the successor to current Fed chair Jerome Powell, telling the National Economic Council director during a White House event that “I actually want to keep you where you are, if you want to know the truth.”

Mr Hassett once was considered the frontrunner, along with Fed governor Christopher Waller, former governor Kevin Warsh and BlackRock Inc executive Rick Rieder.

t’s now seen as a four-man race, while Mr Rieder’s candidacy has recently gained late momentum, according to people familiar with the matter, as some view him as potentially better placed to win US Senate confirmation.  

A criminal probe targeting the Federal Reserve and Mr Powell over the remodeling of the central bank’s headquarters injected a new element into the Fed search and

sparked a wave of backlash

.

Mr Powell accused the Justice Department of opening the investigation to pressure the central bank into cutting rates.

Key lawmakers, including Senate Banking Committee member Thom Tillis, warned that Mr Trump’s nominees will be scrutinised more closely. 

Coupled with Mr Trump’s relentless pressure on Mr Powell and the Fed to lower interest rates, the DOJ’s move renewed a broader market focus on the central bank’s autonomy from political interference, though Mr Trump said “I don’t know anything” about the probe.

Axios reported on Jan 12 that Treasury Secretary Scott Bessent warned Mr Trump the investigation had created a mess and could be bad for financial markets.

While Mr Bessent declined to comment on the Axios report on NBC’s Meet the Press, he cited Treasury bond auctions last week as evidence that “the market is looking beyond this.”

Bond yields fell Jan 13 and Jan 14, while the Treasury market was relatively little changed last week.

Mr Bessent told NBC he isn’t concerned that the Senate could block Mr Trump’s eventual nominee to helm the Fed.

“I think we will move forward,” he said. “I believe that we will probably be hearing from the Banking Committee soon on what they would like to see.”

Mr Powell’s term as head of the central bank ends on May 15.

The search process is being led by Mr Bessent, who Mr Trump has said removed himself from consideration for the role.

“There are a lot of great candidates, and it could well be that the president’s right to make the decision that this is the best place for me right now,” Mr Hassett said on Jan 18, referring to the White House. 

He said he was “humbled and gratified” by Mr Trump’s comment about his future, saying the president is “such a good guy.” BLOOMBERG