Kevin Hassett, director of the National Economic Council, speaks to members of the media outside the White House in Washington, U.S., Friday, October 24, 2025.
Francis Chung | Bloomberg | Getty Images
President Donald Trump knows who he will choose as the next head of the Federal Reserve, but he isn’t saying it yet. The forecast markets have already made up their mind, but the leader is also acting timid.
While that part of the mystery seems ready to be unraveled in the coming weeks, what is much less certain is what kind of environment the new central bank chief will encounter at a potential crossroads for the U.S. economy.
National Economic Council Director Kevin Hassett was named the clear front-runner, buoyed by a Bloomberg News report last week that hampered the five-person race to succeed current chairman Jerome Powell, whose term expires in May.
Asked about the situation on Sunday, Trump told reporters aboard Air Force One: “I know who I’m choosing, yes. We’ll announce it.” Plus, he smirked when asked about Hassett, adding, “I won’t tell you, we’ll announce it.”
The candidate himself floated around the weekend discussions, also avoiding questions about his prospects. Hassett is part of the field this also includes current governors Christopher Waller and Michelle Bowman, former governor Kevin Warsh and BlackRock fixed income chief Rick Rieder.
“I’m honored to be among a group of really great candidates,” Hassett said Sunday on CBS’ “Face the Nation.” But he noted that markets had reacted positively to reports of him emerging as the front-runner, saying Americans “can expect President Trump to pick someone who will help them, you know, get cheaper car loans and easier access to mortgages at lower rates.”
Shortly before that, on Fox News, Hassett merely declared: “If he chooses me, I will gladly serve.”
Prognostication markets have accelerated significantly in recent days, making Hassett’s odds high that he will get the job. From Monday afternoon Kalshi investors assigned a probability of 79%, while Predict put the odds at 75% i Polimarket he had it at just 63%, with “no announcement by Christmas” having the second highest probability at 22%, easily surpassing any of the other four finalists.
Divided Fed
That is, whoever he chooses will take over the Fed currently torn between officials who believe that additional interest rate cuts are justified to head off potential labor market problems, against those who fear that inflation remains a risk that will be exacerbated by further monetary easing.
Futures market investors attribute an 87.6% chance of a cut to the next interest rate decision on December 10, which has been highly volatile in recent weeks.
Trump and other administration officials have vocally advocated for much lower rates, and the president has said it is a litmus test for the next term. In 2026, members of the rotating cast of regional presidents who receive votes on the Federal Open Market Committee will have a hawkish tilt, meaning they will favor fighting inflation and keeping rates steady.
But the coming Fed regime will be about more than just interest rates.
IN in an interview with CNBC last weekTreasury Secretary Scott Bessent, who is leading the search for a Fed chair, has said he favors rethinking the Fed’s mission.
“We have reached a point where monetary policy has become very complex and goes beyond just cutting interest rates,” he said. “I think we need to simplify things a bit.”
Call for reform
In particular, Bessent emphasized the role of regional presidents.
While they play a relatively limited role – at least compared to the president and the Board of Governors – in setting interest rates and other monetary policy matters, public comments from local leaders can sometimes move markets.
Bessent said this is part of broader issues related to the outsized role the Fed has played in the economy and financial markets, largely since the financial crisis, when the central bank played a key role in implementing programs to steer the economy out of its worst slide since the Great Depression.
“I think it’s time for the Fed to just step aside as it has done before, calm things down and work for the American people, and then get monetary policy on track,” he said. “All these speeches by bank CEOs… are just unnecessary. Why don’t they actually come out and talk to the American people about the issues that matter, instead of the short term for the next meeting?”
The view on regional chairs is important because they are scheduled to be reappointed in 2026. Local boards hire chairs, but they are subject to approval by the Board of Governors. One issue Bessent also commented on was the fact that several presidents are not from the districts they represent.
Mohamed El-Erian, Allianz’s chief economic adviser, praised Bessent’s stance.
“We don’t need the Fed on an ongoing basis,” El-Erian said Monday morning on CNBC. “We need the Fed to cool it down. We need the Fed to step back and take a broader, visionary view. We need reforms. We desperately need reforms. I think all five on the shortlist are committed to reforming this institution that is crucial not only to the U.S. but to the global economy.”
Correction: The Federal Reserve’s next policy meeting will be on December 9-10, with a rate decision expected to be released on the second day. An earlier version of this story misstated the date.
Source link
, Policy,Federal Reserve Bank,Markets,Donald Trump,Donald J. Trump,Breaking news,Economy,Kevin Hassett,business news , #regime #change #looming #Fed #candidate #emerging #leading #candidate #chairman, #regime #change #looming #Fed #candidate #emerging #leading #candidate #chairman, 1764631960, with-a-regime-change-looming-at-the-fed-one-candidate-is-emerging-as-the-leading-candidate-for-chairman