Could National Economic Council Director Kevin Hassett be out of the running to be named to the top job at the Federal Reserve?
On Friday, President Donald Trump signaled a hesitance about tapping Hassett to lead the Federal Reserve and in the process has shaken up the contest over who will be Chairman of the central bank, according to a report by Politico.
At a White House event, Trump called the prospect of shifting Hassett from his current role “a serious concern,” while applauding Hassett’s latest appearance on television. Hassett has been widely viewed as the frontrunner to succeed Fed Chair Jerome Powell, whose term as chair ends in May.
Earlier this month, Powell revealed that the U.S. Justice Department served the Fed with grand jury subpoenas and threatened a criminal indictment related to his testimony before the U.S. Senate.
Hassett has Championed Trump’s Vision
Hassett has been a ubiquitous champion for the administration’s economic vision on television over the past year.
“I see Kevin’s in the audience, and I just want to thank you. You were fantastic on television today. I actually want to keep you where you are if you want to know the truth,” Trump said. “I’m saying, wait a minute, if I move him, these Fed guys, certainly the one we have now, they don’t talk much. I would lose you. It’s a serious concern to me.”
Asked about the status of Hassett’s candidacy in the wake of Trump’s remarks, former White House chief strategist Steve Bannon texted: “DEAD.”
Trump and Treasury Secretary Scott Bessent both have indicated that a decision on Powell’s replacement would come soon, a timeline that might now be in question as the Fed race looks to be in flux, Politico reported. Beyond Hassett, the shortlist for the chairman’s job consists of former Fed board member Kevin Warsh, now seen by betting markets as the frontrunner; current Fed board member Christopher Waller; and BlackRock executive Rick Rieder.
Politico reported that GOP lawmakers are expressing a growing concern about the Fed’s independence following a move by the Justice Department to investigate Powell over statements he made to the Senate last year about cost overruns on the renovation of the Fed’s headquarters.
Some Republicans such as Sen. Thom Tillis of North Carolina have pointed to concerns about Hassett’s ties to the White House, Politico said. Tillis, a member of the Senate Banking Committee with jurisdiction over Fed nominees, said last week that he would not vote to confirm anyone to the central bank until the probe into Powell’s remarks on the renovation project was resolved.
Hassett is the only finalist who has weighed in on the investigation, saying last week that he “would expect that the markets would be happy to see that there’s more transparency at the Fed.”
Trump Has Been Critical of Powell
Trump has criticized Powell since he returned to the White House for not lowering interest rates enough. Trump says he believes he should have a say in interest rate policy and that any new Fed chair should share his view that borrowing costs should be lower, Politico said.
Hassett has supported many of Trump’s criticisms of Powell.
For his part, Powell said he thought the DOJ’s action is not as much about his testimony but more is about a difference of opinion on interest rates. In a statement, he said the DOJ’s move should be seen in the broader context of the administration’s threats and ongoing pressure
The post Hassett’s Fed Chair Bid Thrown into Doubt by Trump first appeared on The MortgagePoint.
