Kevin Hassett defends Fed independence as Trump considers him and Kevin Warsh for chairman, prediction markets shift and new rate cuts leave crypto in a wait-and-see mode.
Summary
- Kevin Hassett, now a top Fed chairman, says Trump’s positions only matter if they are backed by data, highlighting the FOMC’s vote-driven process.
- Trump says the race is down to Hassett and ex-Governor Kevin Warsh, while prediction markets like Polymarket have diminished Hassett’s once dominant chances.
- The Fed’s latest 25 basis point cut to 3.5%-3.75% keeps crypto markets largely flat even as Trump pushes for deeper easing through 2026.
Kevin Hassett, a leading candidate to become the next chairman of the U.S. Federal Reserve, said the central bank’s decision-making process would remain free from political pressure, according to comments made Sunday on CBS News’ Face the Nation.
Hassett reiterates Fed independence in new CBS interview
Hassett emphasized the institutional independence of the Federal Reserve and addressed concerns about the president’s potential influence on monetary policy. According to reports, an announcement on the next Fed chairman is expected in mid-January.
When asked if President Donald Trump’s opinions could carry any weight within the Fed, Hassett replied: “No, no, he wouldn’t carry any weight. It’s just his opinion that matters if it’s good, you know, if it’s based on data.”
Hassett explained that each policy argument would be considered on its merits by the twelve voting members of the Federal Open Market Committee. “If you go to the committee and say, the president has made this argument and it’s a very good argument, I think. What do you think? If they reject it, they’ll vote another way,” Hassett said.
According to Trump’s recent statements, the race to succeed current Fed Chairman Jerome Powell has narrowed. On Friday, Trump told The Wall Street Journal that the competition had come down to two frontrunners of four finalists: Hassett and former Fed Governor Kevin Warsh.
“Yes, I think so,” Trump said when asked if Warsh was at the top of his list, according to the Journal. “I think you have Kevin and Kevin. They’re both – I love the two Kevins.”
Prediction markets have been following the match closely. Earlier this month, platforms like Kalshi and Polymarket showed Hassett having as much as an 85% chance of becoming the next Fed chairman. Those chances diminished after Trump’s public praise for Warsh. At the time of writing, Hassett led on Polymarket with a 52% probability, while Warsh followed with 39%, according to the platform.
Trump stated in the Wall Street Journal interview that the next Fed chairman should consult with him on interest rate decisions. “Normally that’s not done anymore. It used to happen routinely. It should be done,” Trump said, according to the report. “I don’t think he should do exactly what we say. But that’s certainly true: I’m a smart voice and it should be listened to.”
The Federal Reserve cut interest rates by 25 basis points last Wednesday, bringing the target range to 3.5%-3.75%. According to market data, cryptocurrency markets remained largely flat in the days following the decision.
Powell said at the Federal Open Market Committee meeting that “in the near term, risks to inflation are skewed to the upside and risks to employment are skewed to the downside, a challenging situation. There is no risk-free path for policy.”
According to the Wall Street Journal, Trump has indicated that he wants further interest rate cuts in 2026. Speaking about Warsh, Trump said: “He believes you should lower interest rates. And so does everyone else I’ve talked to,” the Journal reported.
