Trump Shakes Up Expectations on Who Will Be the Next Fed Chair
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What did President Trump say about the next Fed Chair?
President Trump signals that one candidate for the next Fed chair may be out of the running.
Think about this as a reality TV show like The Apprentice Fed Edition. And so today is just another episode in this drama of who Donald Trump is going to pick for probably the most important personnel job for the rest of his term.
Plus, ads are coming to chat GPT as OpenAI looks for fresh revenue. And Agriculture Secretary Brooke Rollins says you can have a good dinner for $3. Our reporters check that out. It's Friday, January 16th. I'm Alex Osola for The Wall Street Journal.
How does the competition for the Fed Chair resemble a reality show?
This is the p.m. edition of What's News, the top headlines and business stories that move the world today. The contest for the next chair of the Federal Reserve, what you may recall as the battle between the two Kevins, is far from over. Today, President Trump signaled that he may want to keep National Economic Council Director Kevin Hassett in his current job. Speaking at a health care event at the White House today, Trump addressed Hassett, who was seated in the front row.
You were fantastic on television today. I actually want to keep you where you are, if you want to know the truth. Kevin Hassett is so good. I'm saying, wait a minute. If I move him, these Fed guys, certainly the one we have now, they don't talk much. I would lose you. It's a serious concern to me.
Fed Chair Jerome Powell's term is up in May. For more on where the contest to succeed him stands, I'm joined now by WSJ Chief Economics Correspondent Nick Timoros. So, Nick, at certain points towards the end of last year, Hassett seemed like maybe the frontrunner. Today we hear from Trump, maybe that's not true anymore. Where does that leave the other Kevin in the running, former Fed Governor Kevin Warsh? And how up in the air is this decision?
Well, think about this as a reality TV show, like The Apprentice Fed Edition. And so today is just another episode in this drama of who Donald Trump is going to pick for probably the most important personnel job for the rest of his term. He's been saying he likes the two Kevins, but today he indicated that he thought maybe Kevin Hassett should stay in the White House. And so that naturally would lead everybody to think that that it's now the other Kevin, Kevin Warsh, who was a Fed governor 15 years ago, in the poll position. But just as six weeks ago, everybody thought this was a done deal for Kevin Hassett, it's Donald Trump. Things can change. Trump always keeps us guessing, and this is no different.
Are the other candidates still serious contenders? There was Fed Governor Christopher Waller and BlackRock Executive Rick Reeder.
Look, if you've interviewed with Donald Trump for a job and he hasn't picked anybody for the job, even if you're not the frontrunner, you still have a chance because he could change his mind again. So initially, they had suggested this would be an October-November decision. Most recently, the timing has shifted to the next few weeks. Jay Powell, the current Fed chair, his seat runs until May 15th. You would probably want to do it two or three months ahead of that so that the Senate can have plenty of time to do the confirmation.
You write that the criminal investigation into Powell has thrown a twist into the search for his replacement. What are the issues that have come up on Capitol Hill?
So there are a lot of people who today analysts want to connect with. the backlash to the probe by the DOJ into the Fed to Hassett falling out of favor. And the reason for that is pretty simple. Kevin Hassett had been seen as the frontrunner because of his closeness to Trump, that Trump wants someone who's loyal. But the probe creates a problem, which is nobody likes this on Capitol Hill. They think it underscores the idea that
What implications does Trump's support for Kevin Hassett have?
that Donald Trump is going to compromise the independence of the Fed. And so now there's much more attention being placed by the Senate that's going to have to confirm the next Fed chair on who this person might be. And so the thinking there would be maybe it'll be easier to get somebody confirmed if they have a little bit more distance and can hold up the idea that they'll be independent.
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