In an exclusive interview with The Wall Street Journal, President Trump revealed he is leaning toward nominating either former Fed governor Kevin Warsh or National Economic Council Director Kevin Hassett as the next Federal Reserve Chairman. Trump emphasized that his choice must be willing to lower interest rates and consult with him on monetary policy.
Key Takeaways:
Top Contenders: Trump confirmed that Kevin Warsh and Kevin Hassett are at the top of his list, referring to them as "the two Kevins." While Hassett was recently viewed as the front-runner, Trump stated that Warsh remains a top candidate.
Consultation on Rates: Breaking from recent tradition, Trump believes the next Fed Chair should consult with the President on interest rate decisions. He argued, "I’m a smart voice and should be listened to."
Aggressive Rate Cuts: Trump outlined a desire for significantly lower borrowing costs, stating he wants interest rates to be at 1% or lower a year from now to help reduce the cost of financing the $30 trillion national debt.
Litmus Test for Warsh: During a recent meeting, Trump reportedly pressed Warsh on whether he could be trusted to support interest-rate cuts. Trump noted in the interview, “He thinks you have to lower interest rates.”
Past Regrets: Trump expressed frustration over his 2017 appointment of current Chair Jerome Powell, stating he was given a "bad recommendation" at the time and wants to be more careful with this selection.
Other Potential Candidates: While focused on Warsh and Hassett, the administration has also vetted current Fed governors Christopher Waller and Michelle Bowman.
Polymarket's had Hassett as the favorite at the mid 80% last week, but that number has been reduced to 66% currently. Warsh meanwhile has moved up to 31%.
More from the Fed, SF Fed Pres. Mary Daly said that she favored a cut at this week's meeting.
