New Fed News Agency: Hassett’s appointment as Federal Reserve Chair has been "internally confirmed."

On Tuesday, according to a report by Nick Timiraos, a Wall Street Journal reporter known as the "new Fed communicator," although interviews for Fed Chair candidates are still ongoing, President Trump appears to be leaning toward selecting longtime advisor Kevin Hassett for the position. This appointment may become the most important personnel decision of Trump’s second term.

Timiraos reported that Trump told reporters on Sunday, "I know who I want to choose," and when asked if it was Hassett, he simply smiled and did not respond. White House National Economic Council Director Hassett satisfies two key criteria for the president: loyalty and credibility in the markets.

Last week, after news broke that Hassett was a leading candidate, long-term interest rates declined, which was viewed as evidence that he could earn market trust. Hassett himself said on CBS on Sunday that the market response proved he could achieve Trump’s rate cut goals without sacrificing inflation credibility.

Loyalty Becomes a Decisive Factor

Timiraos said Hassett’s close relationship with the president gives him an advantage unmatched by other contenders. He served as Chair of the White House Council of Economic Advisers from 2017 to 2019, briefly returned as a senior advisor after the pandemic in 2020, and became National Economic Council Director in January when Trump returned to the White House.

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 Besant has been conducting a systematic selection since Labor Day, narrowing the original 11 candidates to five. However, Trump appears to have internally settled on his choice.

The five final candidates are Hassett, former Fed governor Warsh, current Fed governors Waller and Bowman, and BlackRock executive Rieder. Warsh was once considered a frontrunner alongside Hassett this summer, but those who have spoken with him recently say he no longer sees himself that way.

Selection Process Nears Its End

Timiraos stated that Treasury Secretary Besant has been leading a months-long public selection process, with candidates competing through cable TV and multiple interviews. The finalists have met with Besant, and starting this week will meet with Vice President JD Vance and other White House staff, then meet with Trump. Besant said Trump may announce his nominee before Christmas.

White House spokesperson Kush Desai said: "All discussions about the Fed nomination are speculation until President Trump makes an official announcement."

Though all signs point to Hassett, those familiar with the matter say Trump could still change his mind. According to sources, Trump was still discussing last week with allies about who should become the next Fed Chair and asked allies to make the case for Hassett or Warsh. Someone told Trump that if he chose Hassett, he would lose his National Economic Council Director.

Another person who discussed the matter with Trump said Besant is currently the only candidate who could alter Hassett’s chances. Although Besant has privately and publicly ruled out running, direct sources say Trump told allies last week that he greatly appreciates Besant and is still willing to consider him as a potential Fed Chair candidate.

Professional Qualifications and Controversy

Timiraos stated that besides loyalty, Hassett’s advantage is also in being a PhD economist who has published papers and worked as an economist at the Fed. He has solid conservative credentials, confirmed by the Senate with bipartisan support as Economic Council Chair in 2017.

However, his candidacy has raised concerns among some former colleagues, who question whether he has the temperament for the role and the resolve to stand up to Trump when needed. Some who helped him gain congressional support are uneasy about his public statements criticizing the Fed.

During Trump’s first term, Hassett firmly defended the importance of central bank independence, but this year he joined Trump in sharp criticism of the Fed and Powell. He accused the Fed in summer and last month of partisan bias for not cutting rates more aggressively, an allegation almost universally opposed by Fed policymakers.

Powell will step down in May. This successor selection has become a rare public competition, contrasting sharply with decades of precedent. Since 1987, when Greenspan replaced Volcker, each new Fed Chair has pledged policy continuity to promote market stability, but candidates this time must distance themselves from Powell.

The Fed has cut rates at its last two meetings, but some officials remain cautious about further cuts, including at next week’s meeting, where they must balance concerns over a weakening labor market and persistent inflation.

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