Fed favourite backs cautious easing as mortgage market eyes relief
White House National Economic Council director Kevin Hassett, now seen on Wall Street as a leading contender to replace Jerome Powell at the Federal Reserve, frames this week’s expected rate cut as a test of central bank discipline rather than a political drama over affordability and inflation.
With core inflation still around 3% and housing costs weighing heavily on borrowers, Hassett argues that the Fed should move gradually and avoid pre‑committing to an easing path, even as futures markets point to a 25‑basis‑point reduction.
Praising Powell’s committee strategy
Hassett, speaking ahead of the Federal Open Market Committee meeting, credits Powell with building consensus on a cut after officials have appeared divided.
“Well, it looks to me like Chairman Powell has done a good job of herding the cats at the committee,” he said on CNBC.
“If you look at the comments that different committee members were making just a few weeks ago, it looked like they were very evenly split about whether they should cut or not.”
“I think that Chairman Powell agrees with me on this one, that we should probably continue to get the rate down some, and do so prudently with an eye on the data,” Hassett said.
“The committee was really in diverse opinions before, and it looks like Chairman Powell has done a good job of getting people to circle around, if futures markets write the right answer.”
Asked how restrictive policy should be next year, Hassett resists the common “how many cuts” question.
“I hate to disappoint with the sort of counting of cuts, but I can say that what you need to do is watch the data,” he said.
“The Fed chair’s job is to watch the data and to adjust and to explain why they’re doing what they’re doing. And so to say, ‘I’m going to do this over the next six months’ would be irresponsible, really.”
A crowded field for the Fed chair
Hassett also downplays the idea that Trump faces a difficult choice among potential Fed nominees.
“If you look at it, Chris Waller is one of the best monetary theorists of the last generation,” he said, praising Waller’s academic work.
“Mickey Bowman’s the best regulator on earth… And Kevin Warsh is about the most experienced Fed person that there is.”
“So the point is that the president doesn't have a tough choice. He's got a guaranteed good choice,” Hassett said. “And if I happen to be that choice, I'll be pleased to help him serve.”
Treasury secretary Scott Bessent signaled momentum in the search for the next Federal Reserve chair, saying there is "a very good chance that the president will make an announcement before Christmas."https://t.co/ialAFOXZNJ
— Mortgage Professional America Magazine (@MPAMagazineUS) November 27, 2025
What it could mean for mortgage professionals
For lenders and brokers, the key question remains how a modest cut, paired with a still‑elevated 10‑year Treasury yield, would filter through to mortgage rates and product pricing.
Market strategists have stressed that changes to the Fed’s balance sheet runoff could “likely lower treasuries, which would then likely lower mortgage rates,” amplifying the impact of any policy move.
Hassett’s emphasis on data‑dependent, incremental easing point to a slow‑burn story for the housing finance industry: gradual relief rather than a rapid reset, and a premium on advisers who can translate Fed nuance into concrete guidance for rate‑sensitive borrowers.
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