Hassett emerges as frontrunner as Trump plans to name new Federal Reserve chair
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."
In a Tuesday interview on CNBC, Bessent noted he had only one remaining candidate interview before the selection process reaches its final stage.
"But it's his prerogative, whether it's before the Christmas holidays or in the new year. But I think things are moving along very well," he added.
The timeline matters for mortgage markets and the broader economy. Powell's current term as chair expires in May 2026, and the central bank faces growing internal division over inflation and employment trends as it weighs future interest rate decisions.
Kevin Hassett emerges as leading contender
Kevin Hassett, the White House National Economic Council director, has emerged as the frontrunner to become the next Federal Reserve chair, according to Bloomberg sources.
Hassett has publicly aligned with Trump's preference for lower interest rates, telling Fox News in November that he would "be cutting rates right now" if he held the Fed chair role because "the data suggests that we should."
The five finalists narrowed from an initial slate of nearly a dozen candidates include Hassett, former Fed governor Kevin Warsh, Fed vice chair for supervision Michelle Bowman, current Fed governor Christopher Waller, and BlackRock executive Rick Rieder.
A key advantage for Hassett: Trump knows and trusts him. This stands in contrast to current Chair Jerome Powell, whom Trump nominated during his first term but later came to resent over rate-cutting decisions. Trump has publicly criticized Powell as "grossly incompetent" and said he would "love" to fire him.
Shifting Fed philosophy on the horizon
Bessent indicated the incoming administration views the Federal Reserve's role differently. "I think we've got to kind of simplify things," he said.
"I think it's time for the Fed just to move back into the background, like it used to do, calm things down and work for the American people."
The Fed has already begun its rate-cutting cycle, reducing its benchmark rate by 25 basis points each in September and October following a prolonged holding period earlier in 2025.
However, central bank policymakers are now divided over whether December will bring another reduction.
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