White House economic adviser Kevin Hassett said President Donald Trump may well keep him in his current job, which would eliminate him from contention for the next Federal Reserve chair.
“From the beginning, he and I have talked about whether it’s better for me to be here in the West Wing or over at the Fed,” Hassett said on Fox News’ “The Sunday Briefing.” “I don’t think he’s made a final call on that.”
Trump expressed reluctance last week about nominating Hassett as the successor to current Fed Chair Jerome Powell, telling the National Economic Council director during a White House event that “I actually want to keep you where you are, if you want to know the truth.”
Hassett once was considered the front-runner, along with Fed Governor Christopher Waller, former governor Kevin Warsh and BlackRock Inc. executive Rick Rieder. It’s now seen as a four-man race, while Rieder’s candidacy has recently gained late momentum, according to people familiar with the matter, as some view him as potentially better placed to win U.S. Senate confirmation.
A criminal probe targeting the Federal Reserve and Powell over the remodeling of the central bank’s headquarters injected a new element into the Fed search and sparked a wave of backlash.
Powell accused the Justice Department of opening the investigation to pressure the central bank into cutting rates. Key lawmakers, including Senate Banking Committee member Thom Tillis, warned that Trump’s nominees will be scrutinized more closely.
Coupled with Trump’s relentless pressure on Powell and the Fed to lower interest rates, the DOJ’s move renewed a broader market focus on the central bank’s autonomy from political interference, though Trump said “I don’t know anything” about the probe.
Axios reported on Jan. 12 that Treasury Secretary Scott Bessent warned Trump the investigation had created a mess and could be bad for financial markets.
While Bessent declined to comment on the Axios report on NBC’s Meet the Press, he cited Treasury bond auctions last week as evidence that “the market is looking beyond this.”
Bond yields fell Tuesday and Wednesday, though the Treasury market was relatively little changed last week.
Bessent told NBC he isn’t concerned that the Senate could block Trump’s eventual nominee to helm the Fed.
“I think we will move forward,” he said. “I believe that we will probably be hearing from the Banking Committee soon on what they would like to see.”
Jerome Powell’s term as head of the central bank ends on May 15. The search process is being led by Bessent, who Trump has said removed himself from consideration for the role.
“There are a lot of great candidates, and it could well be that the president’s right to make the decision that this is the best place for me right now,” Hassett said Sunday, referring to the White House.
He said he was “humbled and gratified” by Trump’s comment about his future, saying the president is “such a good guy.”
