• Kevin Hassett emerges as a leading candidate to replace Jerome Powell as Federal Reserve chair in 2026, but faces pushback from Trump allies worried about his closeness to the president.
  • Treasury Secretary Scott Bessent confirmed in October 2025 that Hassett is on a shortlist of five candidates, with President Trump naming him and former Fed Governor Kevin Warsh as top picks.
  • Analysts downplay immediate market risks, noting Hassett's influence would be limited as one vote on the FOMC, but concerns persist about potential erosion of Fed independence.

Internal Resistance to a Key Contender

Kevin Hassett's candidacy for Federal Reserve chair is encountering resistance from within President Trump's inner circle, according to people familiar with the matter. The current National Economic Council Director, who has served in multiple roles across both Trump administrations, is seen by some allies as "too close to the president," raising fears that his appointment could undermine the central bank's traditional independence.

Treasury Secretary Scott Bessent confirmed in October 2025 that Hassett is among five candidates being considered for the position, with a nomination expected early in 2026. President Trump has publicly identified Hassett and former Fed Governor Kevin Warsh as his preferred choices, emphasizing his desire for candidates who support immediate interest rate cuts to stimulate economic growth.

Dovish Policy Stance and Political Ties

Hassett brings a distinct monetary policy perspective to the table, advocating for deep interest rate cuts amid concerns about downside risks in the labor market. This dovish approach contrasts with Chair Powell's more pragmatic stance and aligns with Trump's repeated calls for aggressive monetary easing. The PhD economist, who previously served on the Federal Reserve Board from 1992 to 1997, has defended the administration's tariff policies and maintained a consistent presence in Trump's economic orbit since 2017.

"What institutional investors are really focused on is regulatory stability," one market participant noted, drawing parallels to broader concerns about policy consistency. The worry among some Trump allies, according to CNBC reports, is that Hassett might prioritize political directives over data-driven decision-making, potentially compromising the Fed's credibility.

Limited Influence but Symbolic Significance

Despite the heated discussions behind closed doors, analysts at Wolfe Research suggest the practical implications may be limited. "His influence on monetary policy would be constrained as one vote among many on the FOMC," they noted in recent client communications, adding that investors have largely dismissed immediate risks to Fed independence. Market reaction has been muted, with the S&P 500 showing little movement following the latest reports of internal resistance.

Yet the symbolic stakes remain high. Hassett's long history with Trump—serving as Council of Economic Advisers chair from 2017 to 2019, returning as a pandemic advisor in 2020, and assuming the NEC director role in January 2025—fuels concerns about the appearance of politicization. Some economists worry that even the perception of compromised independence could affect market confidence during future economic shifts.

Looking Ahead to 2026

With the nomination timeline extending into early 2026, the coming months will test whether these internal reservations gain traction or fade amid Trump's clear preference for dovish leadership at the central bank. The parallel consideration of Kevin Warsh, another critic of current Fed policy, suggests the administration is weighing multiple options that align with its economic priorities.

Attempts to reach Hassett for comment through NEC channels were unsuccessful, though people familiar with his thinking say he remains focused on his current responsibilities coordinating broader economic strategy, including tariff implementations and second-term priorities. As one former Fed official put it, "The real test will come when economic data conflicts with political preferences—that's when independence matters most."

Correction: An earlier version of this article misstated the timeline for Hassett's potential nomination; it is expected in early 2026, not late 2025.