Economy

Hassett, Warsh Emerge as Top Contenders for Fed Chair Amid Independence Concerns

Illustration for: Hassett, Warsh Emerge as Top Contenders for Fed Chair Amid Independence Concerns
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Dec 16, 2025

THE BARE STORY

The selection process for the next Federal Reserve chair has narrowed to two main contenders, National Economic Council Director Kevin Hassett and former Fed Governor Kevin Warsh. President Donald Trump is nearing a decision on a successor to current chair Jerome Powell, whose term concludes in May.

While Hassett was previously considered the frontrunner, his candidacy has faced pushback, according to sources familiar with the matter. These individuals have reportedly raised concerns that Hassett is perceived as too close to the president, which they fear could undermine the central bank's independence. Last week, President Trump stated that an interview with Warsh had elevated him to a top-tier contender alongside Hassett.

In public comments, Hassett has emphasized the importance of the Federal Reserve’s independence, stating that interest rate decisions must be driven by data and consensus. He argued that having a good working relationship with the president should not be a disqualifying factor for the position.

The developments have caused fluctuations in prediction markets, where the implied probabilities of each candidate's nomination have shifted. According to Treasury Secretary Scott Bessent, a final decision on the nomination will likely be made in early January. President Trump has been a vocal critic of current chair Powell, demanding more aggressive interest rate cuts.

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• He has recently been elevated to a top-tier contender. Former Fed Governor Kevin Warsh is now considered a main contender alongside Kevin Hassett. His status was reportedly elevated following an interview with President Trump, who now considers him a top candidate.

• His background includes direct experience at the Federal Reserve. The article identifies Warsh as a "former Fed Governor," indicating he has prior experience working within the central bank. This experience is a key part of his profile as a candidate for the institution's top position.

• His rise coincides with concerns being raised about the other frontrunner. Warsh's elevation to a top contender comes as Kevin Hassett’s candidacy has encountered pushback regarding the Fed's independence. This has caused fluctuations in prediction markets, reflecting a shift in the perceived probabilities of each candidate's nomination.

How it may affect me

As a U.S. reader:

• The next Fed chair’s stance on interest rates could affect your borrowing costs for mortgages and loans, as the president desires more aggressive cuts.

• The selection could impact the Federal Reserve's independence from political influence, a factor in maintaining stable, data-driven economic policy.

• Uncertainty over the nominee is causing market fluctuations, and the final decision may affect short-term financial market stability.

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