Kevin Hassett champions the independence of the Federal Reserve as Trump considers both him and Kevin Warsh for the chair position, while prediction markets evolve and recent rate cuts keep crypto in a holding pattern.
Summary
- Kevin Hassett, a top contender for Fed chair, mentions Trump’s views are relevant only if supported by data, highlighting the FOMC’s vote-centric approach.
- Trump posits the race is between Hassett and former governor Kevin Warsh, while prediction markets like Polymarket adjust Hassett’s previously high chances.
- The Fed’s recent 25 bps cut to 3.5%–3.75% keeps the crypto markets largely unchanged, despite Trump advocating for more significant easing into 2026.
Kevin Hassett, a prominent candidate for the upcoming chair of the U.S. Federal Reserve, indicated that the central bank’s decision-making would remain free from political influence, as stated during an appearance on CBS News’ Face the Nation on Sunday.
Hassett reinforces Fed independence in latest CBS interview
Hassett stressed the importance of the Federal Reserve’s institutional autonomy and responded to worries about possible presidential impacts on monetary policy. Reports suggest an announcement regarding the next Fed chair is anticipated in mid-January.
In response to whether President Donald Trump’s views could influence the Fed, Hassett stated, “No, no, he would have no weight. His opinion only matters if it’s sound and based on data.”
Hassett elaborated that any policy proposal would be evaluated based on its merits by the Federal Open Market Committee’s 12 voting members. “If you go to the committee and say the president made this argument, and it’s sound, I think, what do you think? If they reject it, they’ll vote differently,” Hassett added.
According to Trump’s recent remarks, the competition to succeed current Fed Chair Jerome Powell has narrowed. On Friday, Trump conveyed to The Wall Street Journal that the contenders have whittled down to two frontrunners: Hassett and former Fed governor Kevin Warsh.
“Yes, I think he is,” Trump stated when asked about Warsh’s position on his list, as reported by the Journal. “I think you have Kevin and Kevin. They’re both — I think the two Kevins are fantastic.”
Prediction markets have been monitoring the race closely. Earlier this month, platforms like Kalshi and Polymarket showed Hassett with odds peaking at 85% for becoming the next Fed chair. Those probabilities decreased following Trump’s endorsement of Warsh. As of now, Hassett holds a 52% probability on Polymarket, while Warsh trails at 39% according to the platform.
Trump noted in the Wall Street Journal interview that the next Fed chair should engage with him regarding interest rate decisions. “Typically, that’s not done anymore. It used to be the case. It should be done,” Trump insisted. “I don’t think he should follow our directives exactly. But certainly, I’m a smart voice and should be considered.”
The Federal Reserve lowered interest rates by 25 basis points last Wednesday, adjusting the target range to 3.5%–3.75%. Following the decision, cryptocurrency markets have largely remained the same, per market data.
Powell remarked during the Federal Open Market Committee meeting that “in the near term, risks to inflation are tilted to the upside and risks to employment to the downside, presenting a challenging scenario. There is no risk-free path for policy.”
According to the Wall Street Journal, Trump is advocating for further rate cuts in 2026. Discussing Warsh, Trump mentioned, “He believes that interest rates need to be lowered. And so do all others I’ve spoken with,” the Journal noted.
