Hassett Says Trump Has No Role in Federal Reserve Rate Calls

Kevin Hassett says that President Trump would have no role in Federal Reserve rate decisions as the Fed chair race tightens.

Kevin Hassett moved into the spotlight this week after comments about the Federal Reserve independence. 

Hassett said President Donald Trump would not have a say on rate choices if he leads the central bank. These remarks came during a tense moment for markets and politics. 

Investors are now watching the Fed chair race closely because rate policy guides growth, inflation and how risk assets perform.

Hassett stresses Federal Reserve independence on rates

Kevin Hassett spoke on CBS News’ Face the Nation and addressed the concerns directly. 

He said Trump’s opinions would hold no weight on interest rate decisions. For context, Hassett serves as a top economic adviser to Trump and that role created worries about whether Trump would (or could) pressure Hassett.

Hassett says that Trump will be free to offer opinions, but will have no say

Hassett explained the Fed’s structure. Rate choices come from the Board of Governors and the Federal Open Market Committee. Twelve voting members debate data and vote, while consensus drives outcomes.

He said a president may share ideas, but those ideas will still face debate. Committee members can reject them and votes follow evidence rather than loyalty.

These comments came after Trump’s public remarks, where he said he should have a voice on rates. Hassett responded by drawing a clear boundary and said that the Fed must remain independent to work.

The race for Fed chair narrows to two names

Attention has now turned to who will lead the Federal Reserve next as Jerome Powell’s term ends on May 15 and Trump plans to announce a new chair in mid January.

Trump said the race now centres on two candidates, and both share the first name Kevin. This means that Kevin Hassett and former Fed governor Kevin Warsh are currently leading the field.

Prediction markets are now showing this trend as Polymarket shows Hassett at 52% and Warsh at 40%. Kalshi shows similar numbers, despite Hassett holding much higher odds earlier in the month.

Trump told The Wall Street Journal that Warsh ranks high on his list. He also praised Hassett and these comments moved betting markets fast.

In all, the final choice carries weight for investors as each candidate brings a different tone toward rates and growth.

Hassett seen as supportive of lower rates

Many analysts view Hassett as dovish. He often supports lower interest rates to support economic growth, and that view aligns with Trump’s calls for deeper cuts.

For more context, lower rates reduce borrowing costs and businesses often expand under such conditions. This is why equity and crypto traders watch this closely.

Hassett backed larger rate cuts in recent discussions, and some see that stance as friendly to growth assets. 

Despite this view, Hassett has repeated that the Fed follows data. This means that inflation, jobs and financial conditions guide policy, not personal beliefs or the whims of the president.

Related Reading: Fed Expected to Approve Rate Cut During FOMC Meeting on Dec. 10

What happens next for markets and policy

Trump plans to announce the next Fed chair soon and markets will react to that choice.

Investors will be listening to early speeches, as tone often points towards priorities. In other words, how Powell speaks can move prices before what he actually says.

Rate cuts may continue in 2026, but inflation data will guide timing. This being said, crypto traders must remain patient as many expect clearer trends once leadership settles.

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