US President Donald Trump said he is beginning to finalize his preference for who will head the Federal Reserve next year. Trump stated that he is choosing between former Federal Reserve Board member Kevin Warsh and National Economic Council Director Kevin Hassett for the Fed chairmanship.
Speaking to the Wall Street Journal in the Oval Office, Trump stated that Warsh was high on the list of potential candidates. Trump said, “Yes, I think so. There’s Kevin and Kevin. Both Kevins are great. And there are a couple of other great names as well.” While recent comments suggested Hassett was emerging as the favorite, Trump’s remarks indicate that Warsh remains a strong contender.
According to the report, Trump asked Warsh during a nearly 45-minute meeting at the White House on Wednesday whether he would support interest rate cuts if he became Fed chairman. Trump confirmed this information in a Wall Street Journal interview, saying, “He thinks interest rates need to be lowered. Everyone I’ve spoken to agrees.”
Trump argued that the new Federal Reserve chairman should consult with him on interest rate decisions. “It doesn’t happen much anymore, but it used to be routine. I think it should be done,” Trump said, adding that this doesn’t mean the Fed chairman has to follow the White House’s direct instructions, but that his views should be considered. When asked where he wanted to see interest rates in a year, Trump replied, “1 percent, or maybe even lower.” He argued that interest rate cuts would reduce the financing costs of the approximately $30 trillion in US government debt. “We should have the lowest interest rates in the world,” he said.
The Federal Reserve this week cut its policy interest rate by 25 basis points to a range of 3.5–3.75 percent. This decision was made in a vote that saw the most opposition since 2019. Two Fed officials were completely against the rate cut, while former Trump advisor Stephen Miran voted for a larger, 50 basis point reduction.
Trump had hinted in recent weeks that he had made his decision regarding the Fed chairmanship. However, in his latest statements, he said that the final decision had not yet been made. He also expressed his dissatisfaction with having relied on the advice of then-Treasury Secretary Steven Mnuchin when choosing current Fed Chairman Jerome Powell. “There is a name I particularly like, but I want to be careful. Because I received bad advice when I chose Powell in 2017,” he said.
It was reported that Trump was continuing his final round of talks for the Fed chairmanship, including an interview with Hassett. Treasury Secretary Scott Bessent reportedly met with current Fed chairmen Christopher Waller and Michelle Bowman, who were appointed during Trump's first term. Trump stated, “I like everyone I've appointed to the board.”
Hassett, who holds a PhD in economics, is seen as a leading candidate due to Bessent's decision not to seek the position and her long-standing collaboration with Trump. Hassett served as Trump's senior economic advisor from 2017–2019, briefly returned in 2020 during the Covid-19 pandemic, and headed the National Economic Council in January of this year.
Kevin Warsh previously served as an economic advisor under the George W. Bush administration, worked on Wall Street, and served on the Federal Reserve Board of Governors from 2006 to 2011. Trump also interviewed Warsh for the Fed chairmanship in 2017, but at that time preferred Jerome Powell, who favored a dovish monetary policy stance.
*This is not investment advice.
