Hassett Pushes Back on Trump Influence Claims as Fed Chair Decision Nears

Kevin Hassett, one of the leading contenders to become the next chair of the U.S. Federal Reserve, has sought to calm concerns that President Donald Trump could exert undue influence over the central bank, insisting that the Fed’s decision-making process would remain insulated from political pressure.

Speaking on CBS News’ Face the Nation on Sunday, Hassett emphasized the Federal Reserve’s institutional independence and downplayed the idea that a president’s personal views could sway monetary policy outcomes. 

With an announcement on the next Fed chair expected in mid-January, speculation has intensified that Trump could attempt to reshape the Federal Open Market Committee (FOMC) to align more closely with his economic agenda.

Hassett Defends Fed Independence

Asked directly whether Trump’s opinions could carry weight inside the Fed, Hassett was unequivocal.

“No, no, he would have no weight,” Hassett said. “It’s just his opinion matters if it’s good, you know, if it’s based on data.”

Hassett explained that any policy argument—regardless of its source—would ultimately be judged on its merits by the FOMC’s 12 voting members. Even if a president advanced a data-driven case for a particular policy direction, Hassett said, the committee would remain free to reject it.

“If you go to the committee and you say, well, the president made this argument and that’s a really sound argument, I think, what do you think?” Hassett said. “If they reject it, then they’ll vote in a different way.”

Race for Fed Chair Narrows to ‘Two Kevins’

The competition to succeed current Fed Chair Jerome Powell appears to be tightening. 

On Friday, Trump suggested the race had narrowed to two frontrunners out of four finalists: Hassett and former Fed governor Kevin Warsh.

In an interview with The Wall Street Journal, Trump said Warsh was currently at the top of his list. “Yes, I think he is,” Trump said, adding that both candidates were strong options. “I think you have Kevin and Kevin. They’re both — I think the two Kevins are great.”

Prediction markets have been closely tracking the contest. 

Earlier this month, platforms such as Kalshi and Polymarket showed Hassett with odds as high as 85% of becoming the next Fed chair. 

Those odds have since fallen following Trump’s public praise of Warsh. At the time of writing, Hassett still leads on Polymarket with a 52% probability, while Warsh follows at 39%.

Contract asking who the next Fed chair will be (Source: Polymarket)

Trump Signals Desire for Consultation on Rates

Despite Hassett’s emphasis on independence, Trump has made clear he believes the next Fed chair should consult with him on interest rate decisions. While speaking to the Wall Street Journal, Trump argued that presidential input on monetary policy was once common practice and should return.

“Typically, that’s not done anymore. It used to be done routinely. It should be done,” Trump said. While stopping short of calling for direct control, he added: “I don’t think he should do exactly what we say. But certainly we’re — I’m a smart voice and should be listened to.”

The comments have fueled debate over how a Trump-appointed Fed chair might balance political expectations with the central bank’s statutory independence.

Crypto Markets Muted After Rate Cut

The Fed’s latest policy move has done little to energize risk assets. 

Last Wednesday, the central bank cut interest rates by 25 basis points, bringing the target range to 3.5%–3.75%. Despite the easing, crypto markets remained largely flat in the days that followed.

Powell’s remarks at the Federal Open Market Committee meeting suggested a cautious stance rather than a decisive pivot toward looser policy. 

“In the near term, risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation,” Powell said. “There is no risk-free path for policy.”

Looking ahead, Trump has indicated he wants further rate cuts in 2026, a scenario that could provide a stronger tailwind for crypto and other risk-sensitive markets. Speaking about Warsh, Trump said: “He thinks you have to lower interest rates. And so does everybody else that I’ve talked to.”

Whether that view ultimately shapes policy will depend on who takes the helm at the Fed—and how firmly they adhere to the institution’s tradition of independence.