On December 10, 2025, the selection process for the next Federal Reserve Chair during President Donald Trump’s second term has entered its final stages. Kevin Hassett, Director of the White House National Economic Council, is currently seen as the frontrunner. Hassett recently stated that there is still “ample room” for further interest rate cuts in the current U.S. economy, but a reassessment will be needed if inflation rises.
During a Chief Executive Council summit hosted by The Wall Street Journal on Tuesday, Hassett emphasized that if appointed as the head of the Federal Reserve, he would make decisions “based on facts” without political interference. He expressed confidence in garnering support within the Federal Reserve to push forward his policy judgment and believed that President Trump has full trust in his judgment.
He acknowledged that sustaining interest rate cuts would be difficult if inflation rises from the current level of around 3% to 4%. However, he pointed out that current data supports a more accommodative monetary policy. Hassett further confirmed that the Federal Open Market Committee meeting this week might implement an interest rate cut of more than the market’s expectation of 25 basis points.
According to the Financial Times, Trump is set to officially kick off the final round of interviews for the Federal Reserve Chair position this week. The first meeting is scheduled for the 10th with former Federal Reserve Board Governor Kevin Warsh. Besides Hassett and Warsh, other potential candidates include Federal Reserve Governor Christopher Waller, Vice Chair for Supervision Michelle Bowman, and BlackRock investment officer Rick Rieder.
On the 9th, aboard Air Force One, Trump told reporters, “We will reconsider a few candidates, but I already have a pretty clear choice in mind.” He had previously made “support for immediate significant interest rate cuts” a key criterion for selecting the new chair, criticizing current Chair Jerome Powell for not cutting rates decisively enough. Powell’s term as chair will end in mid-May next year.
Despite expressing interest in Treasury Secretary Scott Bessent taking on the role of Federal Reserve Chair, Bessent himself has stated his desire to remain in his current position.
The Financial Times reported, citing multiple sources, that Hassett had proposed a transitional arrangement suggesting he would first become a Federal Reserve Governor, completing Powell’s term scheduled to end in January 2028, thus leaving room for Trump to nominate Bessent as the Chair in the future. However, this plan is contingent upon Powell stepping down as Governor at the same time his term as chair ends in May next year, and Powell has not yet indicated whether he will resign.
Hassett served at the Federal Reserve in the 1990s for about five years and subsequently held positions as an economic advisor within the Republican Party and conservative think tanks for a long time. He entered the White House twice during Trump’s first term and his policy orientation is highly aligned with Trump, making him one of the president’s most trusted economic advisors.
On Wednesday, December 10, the Federal Reserve will conclude its final policy meeting of 2025, with markets widely expecting a third consecutive 25-basis-point interest rate cut, lowering the federal funds rate target range to 3.50%-3.75%. However, the room for further accommodative measures in 2026 is expected to significantly narrow as several regional Federal Reserve Bank presidents have expressed concerns about inflation persisting above the 2% target.
The announcement of Trump’s nominee for the new chair is expected to be made as early as the beginning of January 2026 and will require confirmation by the Senate. It is widely believed that this appointment will be one of the key personnel decisions made by Trump during his second term regarding one of the most influential central banks globally, with far-reaching implications for future monetary policy direction.
(Adapted from Reuters)