Wall Street’s maneuver to block Kevin Hassett’s potential appointment as Fed Chair signals a pivotal clash over monetary policy and institutional independence.
Story Highlights
- Kevin Hassett is being considered by Trump for the role of Federal Reserve Chair.
- Wall Street institutions express concerns over Hassett’s perceived dovishness and political alignment.
- Financial-sector players prefer a more hawkish, independent leader for the Fed.
- The debate underscores tensions between Trump’s growth priorities and Fed independence.
Wall Street’s Concerns Over Hassett’s Potential Nomination
Financial-sector players, including large banks and asset managers, are working behind the scenes to prevent Kevin Hassett from becoming the next Federal Reserve Chair. Their primary concerns revolve around Hassett’s perceived dovishness on inflation and his close ties to President Trump, which they believe could undermine the Fed’s independence. Wall Street’s preference leans towards a more hawkish candidate who can assure stability and credibility in inflation control.
Trump has reportedly teased Hassett as a strong contender for the role, sparking a behind-the-scenes lobbying effort to sway Trump towards more conventional, technocratic candidates. This effort includes advising Trump on the potential market volatility that could result from appointing a Fed chair perceived as politically aligned with the administration.
Wall Street moves to stop Trump from picking Kevin Hassett as next Fed chief — here’s why https://t.co/fLaMDkyhCF pic.twitter.com/Ji3SG2KUqU
— NY Post Business (@nypostbiz) December 5, 2025
Kevin Hassett’s Background and Policy Views
Kevin Hassett, a long-time Republican economist, served as Chairman of the Council of Economic Advisers under Trump from 2017 to 2019. Known for his work on tax policy and supply-side economics, Hassett has been a public advocate of Trump’s economic policies, including deregulation and tax cuts. Despite his expertise in fiscal policy, his lack of direct experience in monetary policymaking raises concerns among mainstream economists and market strategists.
Hassett’s public support for policies that align closely with Trump’s agenda adds to the apprehension. Critics argue that his appointment could lead to a Federal Reserve more responsive to White House preferences, potentially compromising the institution’s credibility and independence, which are crucial for maintaining global confidence in U.S. monetary policy.
Watch:
The Political and Economic Implications
If Hassett were to be appointed, the implications could be significant. Markets might react by pricing in a higher probability of politically motivated rate cuts, leading to greater uncertainty about the inflation path. This could affect bond yields, the dollar, and overall market stability. Politically, Trump’s team could leverage Hassett’s candidacy to promote a cohesive economic vision centered around tax cuts and deregulation, appealing to their conservative base.
On the other hand, Democrats and some Republicans might emphasize the risk to Fed independence, potentially making it a contentious issue during election or confirmation periods. The broader impact on sectors like banking, housing, and corporate finance could be profound, with potential shifts in credit availability, interest rates, and investment strategies.
Sources:
Wall Street moves to stop Trump from picking Kevin Hassett as next Fed chief — here’s why
Trump Says He’s Picked Next Fed Chief
Trump hints economic adviser Hassett may be Fed chair pick
Wall Street cautions Trump, Hassett pick seen risking Fed credibility, raising long yields
