Haslett "out"? Calls for Walsh are increasing! Trump says he hopes Haslett continues to serve as a White House advisor

U.S. President Donald Trump has shown hesitation in nominating Kevin Hassett as the Chairman of the Federal Reserve, expressing a desire for Hassett to continue serving as a White House advisor, which further increases the uncertainty in his search for the next Federal Reserve Chairman.

On Friday local time, Trump stated that if Hassett were to leave his position as the Director of the National Economic Council, it would result in the government losing one of its most influential "spokespersons" on economic issues. Hassett had previously been viewed as a leading candidate to succeed current Federal Reserve Chairman Jerome Powell.

During an event at the White House, Trump said to Hassett:

To be honest, if you want to know the truth, I actually hope you stay in your current position. If I move him, these Federal Reserve people, of course, including the one we have now, they don't really speak out much. I would lose you. That's a serious concern for me.

Trump remarked about Hassett, "We don't want to lose him; let's see how it all develops."

Following Trump's remarks, analysts immediately speculated that Kevin Warsh has become the frontrunner for the next Federal Reserve Chairman position. Evercore ISI's head of central bank strategy, Krishna Guha, stated in a report to clients that this news would "push Warsh directly to the forefront of the competition to succeed Powell as Chairman of the Federal Reserve."

According to previous media reports, Trump was impressed by Warsh during an interview last month and told colleagues during the holiday period that he was captivated by Warsh's intelligence and handsome appearance.

After Trump's comments, the dollar rebounded from intraday lows and rose slightly, while the stock market turned from gains to losses:

• Spot gold fell by 1.5% during the day, reporting at $4,546.43 per ounce. The S&P 500 fell by 0.18%, the Nasdaq dropped by 0.2%, and the semiconductor index's gains narrowed to 0.8%.
• The yield on two-year U.S. Treasury bonds expanded by 2.6 basis points, refreshing the daily high above 3.59%.
• The dollar index rebounded briefly from below 99.20 points, returning to the 99.33 level.

Trump's efforts to fill the vacancy at the Federal Reserve have already encountered resistance in the U.S. Senate. According to procedures, presidential nominees need to be confirmed by the Senate. Key Republican member of the Senate Banking Committee, Senator Thom Tillis, stated that he would oppose any presidential nominations until the Department of Justice's investigation into the Federal Reserve is concluded. Some other Republican senators have also expressed opposition to this investigation.

The issuance of subpoenas to the Federal Reserve has significantly escalated the conflict between the Trump administration and the Federal Reserve over monetary policy issues. Powell has dismissed this investigation as a "blatantly obvious attempt" by the White House to undermine the central bank's independence. Meanwhile, government officials have defended the investigation as a necessary step to ensure taxpayer funds are managed properly.

Trump did not mention the aforementioned controversy in his speech on Friday but indicated that his nominee has not yet been finalized. He recently stated that he plans to announce the nominee for the Federal Reserve Chairman in the coming weeks At the end of last year, Hassett was seen as the strongest contender for the position by Trump's advisory team. However, Trump is still considering other candidates.

In an interview earlier this week, Trump stated that he is considering several candidates, including Hassett and former Federal Reserve Governor Kevin Warsh. "Both Kevins are excellent. Of course, there are also some other good people."

According to media reports, BlackRock Inc. executive Rick Rieder appeared at the White House on Thursday and discussed the position with the president and senior government officials.

Current Federal Reserve Chairman Jerome Powell's term will end on May 15. The selection process is led by U.S. Treasury Secretary Scott Bessent, who Trump previously stated has voluntarily withdrawn from consideration for the position.

As Trump searches for a new Federal Reserve chairman, monetary policymakers find themselves at a very delicate moment, with the U.S. economy pulling them in opposite directions. Employment data for 2025 shows signs of weakness, prompting Federal Reserve officials to lower interest rates, and some within the Fed are calling for further rate cuts to support the job market. However, inflation remains stubbornly above the central bank's 2% target, and several policymakers have indicated that now is the time to hold steady to ensure that monetary policy continues to exert downward pressure on inflation.

Outsiders expect that the new Federal Reserve chairman will seek further rate cuts upon taking office, which aligns with Trump's wishes. However, their ability to build consensus within the Federal Open Market Committee (FOMC) may face challenges. If Powell chooses to remain on the board after his term as chairman ends, this complexity will be further exacerbated. Recent subpoena actions by the U.S. Department of Justice have also increased market speculation about Powell potentially doing so, as his term as a board member will last until January 2028