Trump’s decision on the next Federal Reserve chair could redefine U.S. monetary policy and market dynamics.
Story Overview
- Trump’s shortlist for the Fed chair includes Kevin Warsh and Kevin Hassett.
- Warsh’s re-emergence is supported by Wall Street, notably Jamie Dimon.
- Hassett is favored for his alignment with Trump’s economic agenda.
- An announcement is expected early next year as the term concludes in January.
Trump’s Shortlist for Fed Chair
President Trump has narrowed his choices for the next Federal Reserve chair to Kevin Warsh and Kevin Hassett, as revealed in a Wall Street Journal interview. This decision comes after weeks of speculation and interviews, as Trump seeks a candidate aligned with his favoring of aggressive rate cuts. Warsh, a former Federal Reserve governor, has re-entered the spotlight with backing from influential Wall Street figures, while Hassett remains a strong contender due to his close ties to Trump’s economic policies.
The decision is crucial as it follows Trump’s previous dissatisfaction with Jerome Powell, the current Fed chair, who was often criticized by Trump for not lowering interest rates as aggressively as he desired. Warsh’s experience as a Fed governor from 2006 to 2011 and his support from JPMorgan CEO Jamie Dimon make him a market-friendly choice. On the other hand, Hassett, as the National Economic Council Director, offers a seamless continuation of Trump’s economic agenda.
Wall Street’s Influence
Warsh’s resurgence as a leading candidate is largely attributed to his connections with Wall Street, particularly the endorsement from Jamie Dimon. During a closed-door event, Dimon expressed his preference for Warsh, citing his experience and credibility as vital for maintaining market stability. This endorsement plays a significant role in shaping Trump’s decision, as Wall Street’s confidence can greatly influence economic perceptions and investor behavior.
Trump leaning toward Kevin Warsh or Kevin Hassett to be next Fed chief: report | Fox Business, New York Post
President Trump said Friday that he is focusing on two candidates to chair the Federal Reserve next year, with former Fed Governor Kevin Warsh and National Economic… pic.twitter.com/NYComNPgc4
— Owen Gregorian (@OwenGregorian) December 13, 2025
Despite Warsh’s market-friendly image, Hassett remains a favorite within the White House due to his alignment with Trump’s economic vision. Hassett’s background as an economic advisor and his advocacy for rate cuts resonate with Trump’s priorities. His stance on the Federal Reserve’s independence, acknowledging the president’s role in offering policy opinions while respecting the Federal Open Market Committee’s autonomy, further solidifies his candidacy.
The Federal Reserve’s Independence
The Federal Reserve’s independence is a critical aspect of this decision, as the chair’s role is to balance policymaking with economic stability. Trump’s desire for a candidate who supports lower interest rates could challenge the Fed’s traditional independence. While both Warsh and Hassett have expressed their commitment to the Fed’s autonomy, the appointment of a chair closely aligned with presidential interests could lead to concerns about political interference in monetary policy.
As the final interviews continue, the financial markets remain attentive to any hints of Trump’s decision. The announcement is anticipated in early 2026, coinciding with the end of the current chair’s term in January. The chosen candidate will not only steer monetary policy but also influence economic growth and inflation rates, impacting businesses and consumers alike.
Implications and Expert Opinions
The potential appointment of either Warsh or Hassett carries significant implications for both short-term and long-term economic landscapes. In the short term, the selection could sway market expectations regarding interest rate trajectories. Over the long term, appointing a loyalist might raise concerns about the erosion of the Fed’s independence, risking a politicized approach to monetary policy.
Financial markets, businesses, and consumers are directly affected by these appointments, as changes in interest rates influence borrowing costs, employment, and inflation. Wall Street’s preference for Warsh reflects a desire for stability and experience, while Hassett’s alignment with Trump’s policies underscores a push for economic growth through aggressive rate cuts.
