The White House is preparing for the final round of interviews this week with candidates vying to lead the U.S. Federal Reserve. The contest features White House economic adviser Kevin Hassett and two other leading contenders to replace Jerome Powell when his term ends in May 2026.

According to three senior administration officials speaking to the Financial Times, President Donald Trump and Treasury Secretary Scott Bessent are expected to meet with former Fed Governor Kevin Warsh on Wednesday. Warsh is one of the finalists, alongside current Fed Governors Christopher Waller, Michelle Bowman, and BlackRock’s Chief Investment Officer Rick Rieder. Two additional finalists will be selected from this group, the officials noted.


Hassett was an early favorite, but selection not guaranteed

Kevin Hassett, who heads the National Economic Council, is considered the frontrunner for Powell’s seat, despite concerns among some investors that his close ties to Trump might lead him to support “excessive” rate cuts.

These concerns have been circulating within the Treasury Department and among bond market economists, who fear aggressive cuts could push inflation higher and destabilize the $30 trillion bond market. However, the administration insists that Hassett's appointment is not yet decided, as further interviews are scheduled.

Sources close to Trump’s team say the White House has floated the idea of Hassett serving a shortened term as Fed Chair, though he would still need Senate confirmation.

Earlier this month, Treasury Secretary Bessent presented Trump with a shortlist of four candidates, including Hassett and Warsh. The remaining two spots are expected to go to finalists from the group including Waller, Bowman, and Rieder. Interviews are set to continue next week, with a final decision anticipated by early January. Trump’s chief of staff Susie Wiles may also attend some of the meetings.

“Personnel decisions will be announced directly by President Trump himself. Any speculation before that is meaningless,” a White House spokesperson told the FT.

If Hassett transitions to the Fed, it is expected that Bessent would temporarily lead the National Economic Council, while continuing to serve as Treasury Secretary, according to four people familiar with internal planning.


Powell’s future remains uncertain as Trump signals clear preferences

Powell has not yet indicated whether he plans to remain on the Fed’s board after his term as Chair ends in May. Trump, however, has hinted that he already has a preferred candidate. “We’re looking at a few different people, but I have a pretty good idea who I want,” he told reporters aboard Air Force One on Tuesday.


Markets shift predictions after Trump’s comments

During a White House event on December 2nd, Trump referred to Hassett as a “potential Fed Chair”, causing market odds of his appointment to spike. On platforms like Kalshi and Polymarket, Hassett’s chances briefly rose to 85%, before dipping back to around 72%. Warsh’s odds sit at about 13%, and Waller’s at roughly 5%.

Trump has spent months criticizing Powell and the Fed for being too slow to cut interest rates during his second term. The Federal Open Market Committee (FOMC) has reduced rates twice — in September and again in October — marking the first rate cuts of Trump’s current presidency. A third cut is expected this Wednesday.

At a Wall Street Journal event on Tuesday, Hassett acknowledged that while he sees room for more cuts, he believes the Fed Chair’s most important job is to “follow economic data and avoid political interference.”


Trump questions legality of Powell’s reappointment under Biden

During a speech on Tuesday in Mount Pocono, Pennsylvania, Trump doubled down on his criticism of Powell, claiming he had “just heard” that all four of Biden’s appointments to the Federal Reserve may have been approved through “automatic openings,” suggesting their validity could be challenged.

“It could be that all four Fed commissioners were signed off by Biden... I heard even someone else might have signed those commissions,” Trump said.

He mocked Powell for “acting too late” on interest rates, especially after JPMorgan Chase CEO Jamie Dimon urged cuts. “If those commissions were signed like that, then maybe I’m wrong — but we’ll look into it,” Trump added.


#TRUMP , #Fed , #Powell , #USPolitics , #bondmarket

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