The race for the next chair of the United States Federal Reserve appears to be nearing its conclusion, with longtime Trump adviser Kevin Hassett emerging as the clear front-runner. While official interviews with finalists are still ongoing, President Donald Trump's recent comments and Hassett's unique advantages suggest the outcome may already be decided.
The Front-Runner's Edge: Loyalty and Market Reaction
President Trump hinted strongly at his decision on Sunday, telling reporters, "I know who I am going to pick." Although he did not name Hassett directly, his grin and the broader context point towards his current National Economic Council (NEC) director. Hassett's proximity to the president has been a decisive factor, as other candidates have not had the same opportunity to demonstrate their loyalty.
Hassett served as chairman of the Council of Economic Advisers from 2017 to 2019 and returned as a senior adviser during the Covid-19 pandemic in 2020. He reassumed a key role as NEC director when Trump returned to the White House in January 2025. This long-standing relationship meets Trump's first key criterion: proven loyalty.
His candidacy also passed a crucial market test last week. Long-term interest rates fell following reports naming him as the likely nominee. Hassett himself pointed to this reaction on CBS, stating it showed he could deliver the lower borrowing costs Trump desires while maintaining anti-inflation credibility. "That’s what we saw in the market response to the rumor about me," he said.
A Methodical Search Narrows to Five
Treasury Secretary Scott Bessent has been leading a structured search process since Labor Day, starting with 11 candidates and narrowing it down to a shortlist of five. The finalists include:
- Kevin Hassett (Director, White House NEC)
- Kevin Warsh (Former Fed Governor)
- Christopher Waller (Sitting Fed Governor)
- Michelle Bowman (Sitting Fed Governor)
- Rick Rieder (BlackRock Executive)
While Warsh was initially seen as a top contender alongside Hassett, people familiar with his thinking believe he no longer considers himself the front-runner. The finalists have already met with Bessent and are scheduled for interviews this week with Vice President JD Vance and senior White House staff, before potentially meeting President Trump. Bessent has indicated an announcement could come before Christmas.
Credentials and Controversies Surrounding Hassett
Beyond loyalty, Hassett brings formal economic credentials to the table. He is a published Ph.D. economist who once worked as a staff economist at the Fed itself. He was confirmed by a bipartisan Senate majority for his CEA role in 2017, which bolsters his conservative and establishment credibility.
However, his candidacy is not without concerns. Some former colleagues question his temperament and his fortitude to potentially stand up to presidential pressure. His recent public attacks on the Federal Reserve and Chair Jerome Powell have also troubled some who previously supported him. During Trump's first term, Hassett defended Fed independence, but this year he has echoed Trump's sharp criticism, accusing the Fed of partisanship for not cutting rates more aggressively—a claim most Fed policymakers reject.
This creates a unique challenge. If selected, Hassett would need to rebuild credibility with his future Fed colleagues and the markets, while preserving the loyalty that won him the job. The succession from Powell, who steps down in May 2026, is shaping up to be highly unusual. Unlike past transitions that emphasized continuity, candidates in this race have had to publicly distance themselves from the current chair's policies.
Despite all signs pointing to Hassett, people close to the process caution that Trump could still change his mind. He has continued to solicit opinions from allies, pushing them to make cases for either Hassett or Warsh. Some have noted that choosing Hassett would leave the NEC director role vacant. Intriguingly, some believe the only person who could derail Hassett's nomination now is Treasury Secretary Scott Bessent himself, despite Bessent having ruled himself out publicly and privately.
The decision is arguably the most significant personnel choice of Trump's second term, impacting global markets and the U.S. economy. The Fed has cut rates at its last two meetings, but debates continue internally about the pace of further cuts amid a softening labour market and persistent inflation concerns.
