National Economic Council Director Kevin Hassett speaks to members of the media outside the White House in Washington, DC, USA, on Friday, October 24, 2025.
Francis Chung | Bloomberg | Getty Images
President Donald Trump knows who he will choose to be the next chairman of the Federal Reserve, but he isn't saying yet. The prediction markets have made up their minds, but the leader also remains cautious.
While that part of the puzzle appears to be resolved in the coming weeks, the type of environment the new central bank chief will face at a potential crossroads for the U.S. economy is far less certain.
National Economic Council Director Kevin Hassett was named the clear favorite, buoyed by a Bloomberg News report last week that stymied the five-person race to replace current Chairman Jerome Powell, whose term ends in May.
When asked about the situation on Sunday, Trump told reporters aboard Air Force One: “I know who I'm going to pick, yes. We'll announce it.” Furthermore, he grinned when asked about Hassett and added, “I won't tell you, we'll announce it.”
The candidate himself made the rounds in the weekend discussion group and also dodged questions about his prospects. Hassett is part of a field that also includes current governors Christopher Waller and Michelle Bowman, former governor Kevin Warsh and BlackRock pension chief Rick Rieder.
“I’m really honored to be part of a group of really great candidates,” Hassett said on CBS’ “Face the Nation” on Sunday. He noted that markets reacted positively to the report that he had emerged as the favorite and said Americans “could expect President Trump to pick someone who will help them get cheaper auto loans and easier access to mortgages at lower interest rates.”
Shortly beforehand, Hassett simply stated on Fox News: “If he chooses me, I would be happy to serve.”
The prediction markets have been in overdrive over the past few days and there's a good chance Hassett will get the job. As of Monday afternoon, Kalshi traders were citing a 79% chance, while PredictIt put the chance at 75% and Polymarket at just 63%, with “no announcement until Christmas” having the second-highest probability at 22%, comfortably outperforming all of the other four finalists.
A divided Fed
Whoever the actual choice is will take over a Fed that is currently torn between officials who believe additional rate cuts are warranted to head off potential problems in the labor market and those who fear inflation remains a threat that would be exacerbated by further monetary easing.
For the next interest rate decision on December 10th, futures market traders estimate an 87.6 percent chance of a cut in trading that has been very volatile in recent weeks.
Trump and other administration officials have been vocal about their preference for significantly lower interest rates, and the president has said that would be a litmus test for the next presidency. In 2026, members of the rotating cast of regional presidents who get to vote on the Federal Open Market Committee will have a hawkish bias, meaning they prefer to fight inflation and keep interest rates stable.
But the incoming Fed government will be about more than just interest rates.
In a CNBC interview last week, Treasury Secretary Scott Bessent, who is leading the Fed chair search, said he favored rethinking the Fed's mission.
“We are at a point where monetary policy has become very complicated and involves more than just rate cuts,” he said. “I think we need to simplify things somehow.”
Call for reform
Bessent particularly emphasized the role of the regional presidents.
While they play a relatively limited role – at least compared to the chairman and board of governors – in setting interest rates and other issues related to monetary policy, public comments from local leaders can at times move markets.
Bessent said this is part of broader problems surrounding the outsized role the Fed has played in the economy and financial markets, particularly since the financial crisis, when the central bank played a critical role in implementing programs to pull the economy out of its worst downturn since the Great Depression.
“I think it's time for the Fed to step back into the background like it used to, calm things down, stand up for the American people and put monetary policy on a good track,” he said. “All of these speeches from these bank presidents … are simply unnecessary. Why don't they just come out and talk about the issues that matter to the American people rather than the short-term view of the next meeting?”
The perspective on regional presidents is important because they are up for reappointment in 2026. While local boards hire presidents, they are subject to approval by the Board of Governors. An issue Bessent also addressed was that several presidents are not from the districts they represent.
Mohamed El-Erian, Allianz's chief economic adviser, welcomed Bessent's view.
“We don’t need play-by-play Fed,” El-Erian said on CNBC Monday morning. “We need the Fed to cool down. We need the Fed to step back and take a larger, somewhat visionary view. And we need reform.
Correction: The Federal Reserve's next policy meeting is December 9th and 10th. The interest rate decision will be published on the second day. An earlier version of this story misstated the date.