New Federal Reserve News Agency: Hassett has been "internally confirmed" as the Chairman of the Federal Reserve

On Tuesday, Nick Timiraos, a reporter for The Wall Street Journal, known as the "New Federal Reserve News Agency," reported that although interviews for the Federal Reserve chair candidates are still ongoing, President Trump seems inclined to choose long-time advisor Kevin Hassett for the position. This appointment could become one of Trump's most significant personnel decisions in his second term.

Timiraos stated that Trump told reporters on Sunday, "I know who I'm going to pick," and when asked if it was Hassett, he just smiled and said nothing. Hassett, the director of the White House National Economic Council, meets two key criteria for the president: loyalty and credibility in the market.

Last week, when news broke that Hassett was a leading candidate, long-term interest rates fell, which was seen as evidence of his ability to gain market trust. Hassett himself stated on CBS on Sunday that this market reaction proves he can achieve Trump's desired interest rate cuts without sacrificing inflation credibility.

Loyalty Becomes a Decisive Factor

Timiraos noted that Hassett has an advantage due to his close relationship with the president, which other competitors cannot match. He served as the chairman of the White House Council of Economic Advisers from 2017 to 2019, briefly returned as a senior advisor after the COVID-19 pandemic outbreak in 2020, and became the director of the National Economic Council after Trump returned to the White House in January.

According to insiders, Hassett has expressed to the White House and other government officials his desire for the position and believes he is the best candidate.

U.S. Treasury Secretary Mnuchin has been conducting a methodical selection process since Labor Day, narrowing the initial 11 candidates down to five, but Trump seems to have internally settled on a choice.

The five final candidates include Hassett, former Federal Reserve Governor Warsh, current Federal Reserve Governors Waller and Bowman, and BlackRock executive Rieder. Warsh was seen as a co-front-runner with Hassett this summer, but those who have spoken with him recently believe he no longer sees himself that way.

Selection Process Nearing Conclusion

Timiraos stated that Treasury Secretary Mnuchin has been leading this months-long public selection process, with candidates competing through cable television appearances and multiple interviews. The final candidates have met with Mnuchin and will begin meeting with Vice President JD Vance and other White House staff this week, followed by a meeting with Trump. Mnuchin indicated that Trump might announce the nominee before Christmas.

White House spokesperson Kush Desai stated, "Discussions about the Federal Reserve nomination are speculation until President Trump officially announces."

Although various signs point to Hassett, sources familiar with the situation say Trump may still change his mind. According to insiders, Trump was still discussing with allies last week who should be the next Federal Reserve chair and asked allies to provide reasons for either Hassett or Warsh. Some told Trump that if he chose Hassett, he would lose the National Economic Council director Another person who discussed this matter with Trump indicated that Bessent is currently the only candidate who could change Hassett's chances of winning. Although Bessent has privately and publicly ruled out the possibility of running, sources with direct knowledge revealed that Trump told allies last week that he holds Bessent in high regard and is still willing to consider him as a potential candidate for Federal Reserve Chairman.

Professional Qualifications and Controversies

Timiraos stated that, aside from loyalty, Hassett's advantage lies in his credentials as a published PhD economist who has served as an economist at the Federal Reserve. He has solid conservative credentials, having been confirmed by a bipartisan majority in the Senate in 2017 to serve as Chairman of the Council of Economic Advisers.

However, his candidacy has raised doubts among some former colleagues, who question whether he possesses the temperament for the position and the resolve to stand up to Trump when necessary. Some who helped him gain congressional support are uneasy about his public criticism of the Federal Reserve.

During Trump's first term, Hassett firmly defended the importance of central bank independence, but this year he sharply criticized the Federal Reserve and Powell alongside Trump. He accused the Federal Reserve of having partisan bias for not cutting rates more aggressively this summer and last month, a charge that has been met with opposition from nearly all central bank policymakers.

Powell will step down in May. The selection of his successor is becoming a rare public competition, in stark contrast to the norms of the past few decades. Since Greenspan succeeded Volcker in 1987, every new Federal Reserve Chairman has committed to maintaining policy continuity to promote market stability, but this time candidates must distance themselves from Powell.

The Federal Reserve has cut rates in its last two meetings, but some officials are cautious about further cuts, including at next week's meeting, as they need to balance concerns about a weak labor market and persistent inflation