President Donald Trump has confirmed he has made his decision on who he wants to lead the United States Federal Reserve, setting the stage for a significant shift in monetary policy focused on lowering interest rates.
Hassett Emerges as Leading Contender
While Trump did not reveal the name during a brief exchange with reporters aboard Air Force One on Sunday, December 1, 2025, sources indicate the likely nominee is Kevin Hassett, the President's chief economic adviser and Director of the National Economic Council. The announcement of the official pick is expected soon, potentially before the Christmas holiday on December 25.
Trump has repeatedly criticized the current Fed Chair, Jerome Powell, for not cutting interest rates aggressively enough. His selection process has been overseen by Treasury Secretary Scott Bessent. People familiar with the matter say Trump views Hassett as an ally who will more forcefully pursue the rate cuts the President desires.
Market Reaction and Nominee's Response
The speculation surrounding Hassett's potential nomination has already influenced financial markets. Reports last week briefly pushed the 10-year Treasury yield below four per cent, a move interpreted as a positive market response to the prospect of a more dovish Fed leadership.
When asked about the reports on CBS's Face the Nation this past Sunday, Hassett declined to confirm his status as the frontrunner, calling it a "rumour." However, he pointed to the market's reaction as a sign of optimism. "We had a great Treasury auction, interest rates went down," Hassett stated. He added that the American people could expect Trump to choose someone who would facilitate cheaper car loans and easier access to mortgages at lower rates.
Confirmation Process and Other Candidates
Whoever is formally nominated by President Trump will require confirmation by the U.S. Senate, both for the chair position and for a full 14-year term as a Fed Governor, which would begin in February if the nominee is not already a governor. Powell's term as chair is set to expire in May.
Although Hassett is seen as the probable choice, Trump is known for last-minute changes. The list of other reported finalists includes current Fed Governors Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh, and Rick Rieder of BlackRock Inc. Trump has also frequently suggested he would like Treasury Secretary Scott Bessent for the role, an idea Bessent has consistently rejected.
Analysts have expressed concerns that Hassett, due to his close advisory role to the President, might face challenges in unifying the Fed's rate-setting committee and could be perceived as more susceptible to political pressure. His emphasis on the favourable market reaction to the rumours appears to be an indirect rebuttal to those worries.
