Trump personally stepped in to press the fast-forward button, and the Federal Reserve chairmanship contest has suddenly reached its final interview! The popular candidate Hassett's 'nailed down' momentum has been broken—former board member Warsh unexpectedly received a personal meeting with Trump and Treasury Secretary Mnuchin, and the final candidate suspense is completely heightened.
Currently, although Hassett is still in the lead, there is a discussion in the White House about an unconventional option: letting him serve as 'short-term' chair first. This move keeps a backup plan and lays the groundwork for another key figure: Treasury Secretary Mnuchin.
Despite Mnuchin publicly rejecting multiple times, Trump has always favored him. If Hassett is only a transition, Mnuchin could very well take over the Federal Reserve midway through Trump's second term. This personnel arrangement resembles a step-by-step grand chess game.
The market has already sensed the risk. Some bond investors urgently expressed concerns to the Treasury Department, fearing that Hassett, who has close ties to Trump, would excessively lower interest rates upon taking office and reignite inflation, shaking the $30 trillion Treasury market. Hassett quickly came out to 'extinguish the fire', emphasizing that the Federal Reserve must 'look at the data, not get involved in politics', in an attempt to reassure the public.
All of this is happening against the backdrop of Trump continually pressuring for interest rate cuts and publicly calling for rates to be lowered to 1%. No matter who ultimately occupies this position, they will be walking a tightrope between 'presidential pressure' and 'central bank independence'. This ultimate interview is not just about the candidates, but also about the bottom line of America's future monetary policy.
What do you think, will it be a 'dark horse' comeback, or is the 'script' already written? Let's chat in the comments section～
