Wall Street’s resistance to Kevin Hassett as Trump’s pick for Fed chair highlights a significant clash over economic policy and central bank independence.
Story Highlights
- Kevin Hassett is considered a frontrunner for the Federal Reserve chair position.
- Wall Street expresses concerns over Hassett’s perceived dovish stance on inflation.
- Trump’s preference for loyalists is causing a stir in the financial sectors.
- There is a behind-the-scenes effort to promote more traditional Fed candidates.
Wall Street’s Concerns Over Hassett
Kevin Hassett, a well-known Republican economist and former chair of the Council of Economic Advisers under Trump, is reportedly a leading candidate for the Federal Reserve chair. However, parts of Wall Street are uneasy about his potential appointment. They worry about his perceived dovishness on inflation and his close association with Trump, which could threaten the Federal Reserve’s independence. This apprehension comes amid a backdrop of past Trump criticisms of the Fed’s rate policies.
Segments of the financial establishment are advocating for a Fed chair who embodies a more hawkish stance on inflation and possesses deep central-banking experience. Their preference leans toward candidates who can ensure stability and predictability in monetary policy, which they believe Hassett lacks. This has led to a concerted lobbying effort to steer Trump away from appointing him.
BREAKING: Kevin Hassett is now the clear favorite for the next Fed Chair at 55% odds
He’s known for:
• Pushing for faster rate cuts
• Alignment with Trump admin
• A macro view seen as bullish for stocks/crypto🚀🚀🎉🎉 pic.twitter.com/Vp2mFnEZPO— Bitcoin professor (@Bitcoinprof0637) November 30, 2025
Trump’s Approach and Wall Street’s Response
Donald Trump has a history of preferring loyalists for key positions, as seen during his first term when he criticized Jerome Powell, the then-Fed chair, for not cutting rates aggressively. Trump’s circle has floated candidates like Judy Shelton and Stephen Moore, who faced backlash for their perceived threats to Fed independence. This pattern raises red flags for Wall Street, which fears a repeat of such politicization with Hassett.
This situation highlights a unique conflict where opposition doesn’t just come from Democrats but also from within the pro-business, pro-market Republican ecosystem. Financial institutions are wary of a Fed chair perceived as too politically aligned, which could lead to policy surprises disrupting market stability.
The Implications of Hassett’s Potential Appointment
If Hassett were to be appointed, it could lead to a Fed more responsive to White House preferences, potentially risking higher inflation and eroding global confidence in the Fed’s independence. This could impact long-term Treasury yields and the dollar’s status as a reserve currency. The mix of tax cuts, deregulation, and a pro-growth monetary stance might boost short-term growth, but it also poses the risk of re-accelerating inflation or boom-bust cycles.
For borrowers and businesses, Hassett’s approach could mean lower rates and easier credit in the short term. However, savers and fixed-income investors might suffer from higher inflation and lower real yields if inflation expectations become unanchored. Global investors might reassess U.S. assets, considering the perceived political influence over monetary policy.
Sources:
Wall Street moves to stop Trump from picking Kevin Hassett as next Fed chief
Trump Says He’s Picked Next Fed Chief
Kevin Hassett Could Be Trump’s Fed Chair Pick: 5 Fun Facts
Trump hints economic adviser Hassett may be Fed chair pick
