• Kevin Hassett has become the leading candidate to succeed Jerome Powell as Federal Reserve chair when Powell's term concludes in May 2026.
  • The selection is driven by Hassett's close relationship with President Trump and alignment with the administration's push for lower interest rates.
  • The potential leadership change signals a significant shift in U.S. monetary policy direction and has sparked debate over central bank independence.

Kevin Hassett, the current director of the National Economic Council, has emerged as the frontrunner to take the helm of the Federal Reserve, according to people familiar with the matter. The selection process, which is nearing its final stages, would see the prominent economic adviser succeed Jerome Powell and potentially reshape the central bank's approach to monetary policy.

Hassett's deep background in economic policy and his role as a key architect of the administration's tariff policies have positioned him as the preferred candidate. His alignment with President Trump's frequent calls for lower interest rates has been a decisive factor, the people said, marking a stark contrast with the more hawkish stance often taken under Powell's leadership. The relationship between Trump and Powell has been notably strained, characterized by public clashes over the direction of monetary policy.

Efforts to reach a spokesperson for the National Economic Council for comment were unsuccessful. A White House official declined to comment on what they termed "ongoing personnel deliberations."

The administration has placed high importance on securing a Fed chair who will align with its economic priorities, which include stimulating growth through more accommodative monetary policy. This has raised concerns among some financial leaders and former Fed officials about potential political interference. "The institutional credibility of the Fed is its most valuable asset," said one major bank executive who asked not to be identified discussing sensitive matters. "Any perception that this is being compromised will have market consequences."

Other individuals reportedly under consideration for the role include Fed Governor Christopher Waller, former Fed Governor Kevin Warsh, and BlackRock executive Rick Rieder. However, people involved in the process indicate that Hassett's candidacy has gained the most traction in recent weeks.

If appointed, Hassett is expected to pursue a comprehensive review of the central bank's operations and mandate, reflecting the administration's desire for reform. He has publicly supported innovative financial structures, such as 50-year mortgages, as a method to ease household financial burdens—a policy the Fed is currently reviewing. The succession process holds profound implications not just for interest rates, but for the longstanding principle of central bank independence, with stakeholders closely watching for any signs of a more politicized monetary policy framework.

Correction: An earlier version of this article misstated the end date for Jerome Powell's term. It is May 2026.