Hassett Defends Fed Independence as Trump Backs “Two Kevins” for Top Role
Kevin Hassett, one of the top candidates to take over as chair of the US Federal Reserve, has tried to ease worries about possible political meddling in monetary policy.
Hassett made it clear on CBS News’ on Sunday that the central bank is independent and that President Donald Trump’s views on interest rates will have “no weight” in making decisions.
Trump is preparing to announce his choice in mid-January, sparking speculation that he wants to put friends on the . Some others are worried that this could harm the Fed’s independence.
Hassett rejected these concerns and pointed out the 12-member Board of Governors’ power. “No, no, he would have no weight. It’s just his opinion matters if it’s excellent, you know, if it’s based on data.”
He went into more detail on the deliberative process: “And then if you go to the committee and you say, well, the president made this argument, and that’s a really sound argument, I think, what do you think? If they reject it, then they’ll vote diversely”.
The Race is Down to Warsh and Hassett
In an with The Wall Street Journal on Friday, Trump gave more information on how he chooses people. He said that the race has narrowed down to two leading candidates: Hassett and former Fed Governor Kevin Warsh.
When asked if Warsh was still in the running, Trump said, “Yes, I think he is,” and then added, “I think you have Kevin and Kevin.” I think both of the Kevins are amazing.
Prediction markets have changed as a result. At the begin of the month, sites like Kalshi and said that Hassett had an 85% chance of winning. later than Trump’s statements, those numbers dropped drastically. Hassett is now at 50% on Kalshi while Warsh is at 39%.
Trump also called for more presidential input on rates, which is not currently done. “That’s not something that happens very often nowadays. It was done all the time. He said, “It should be done.”
He made himself sound like an significant voice by saying, “I don’t think he should do exactly what we say.” But we should definitely listen to me because I’m a smart voice. Trump said that he and Warsh had similar views: “He thinks you need to cut interest rates. And everyone else I’ve talked to agrees.
Crypto Stays Flat Because the Fed is Careful
The 25 basis-point rate cut on Wednesday, which set the target range at 3.5% to 3.75%, didn’t have much effect on the crypto markets. Prices stayed the identical, which shows that people are being careful.
Jerome Powell, the outgoing chair of the FOMC, during the meeting about a hard situation: “In the near term, risks to inflation are tilted to the upside and risks to employment to the downside.” There is no way for policy to be risk-free.
hints of further cutbacks in 2026 might assist riskier assets like cryptocurrencies, which could change the way the market operates when new leaders take over.
