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President Donald Trump has indicated he is leaning towards either former Fed governor Kevin Warsh or National Economic Council Director Kevin Hassett to lead the Federal Reserve. Trump has reportedly interviewed finalists for the position, with Warsh now at the top of his list, though he acknowledges other strong candidates remain.
Key Takeaways
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Kevin Warsh has emerged as President Trump's preferred candidate for Federal Reserve chair.
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Kevin Hassett remains a strong contender, with Trump describing both as "great."
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Trump has expressed a desire for the Fed chair to consult with him on interest rate decisions.
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JPMorgan CEO Jamie Dimon has reportedly signaled support for Warsh.
Trump's Preferred Candidates
President Trump stated that Kevin Warsh is now at the top of his list for the next Federal Reserve chair, following an interview with the former Fed governor. "Yes, I think he is," Trump told The Wall Street Journal when asked about Warsh's standing. He also praised Kevin Hassett, the Director of the National Economic Council, noting, "I think you have Kevin and Kevin. They're both — I think the two Kevins are great."
Trump has been critical of the Fed and its current chair, Jerome Powell, for not lowering interest rates aggressively enough. He has repeatedly expressed his belief that the Fed chair should consult with the president on monetary policy decisions, stating, "I'm a smart voice and should be listened to."
Warsh's Stance on Monetary Policy
According to Trump, Warsh shares his view on monetary policy, particularly regarding the need to lower interest rates. "He thinks you have to lower interest rates," Trump said, adding that "everybody else that I've talked to" agrees. This alignment on interest rate policy appears to be a significant factor in Warsh's elevated position on Trump's shortlist.
Other Finalists and Market Reactions
While Warsh and Hassett are the leading contenders, other candidates were also interviewed, including Fed governors Chris Waller and Michelle Bowman, and BlackRock's head of fixed income, Rick Rieder. Following reports of Warsh's increased favorability, prediction markets saw shifts, with Hassett's projected chance of nomination decreasing and Warsh's increasing.
Industry Support
JPMorgan CEO Jamie Dimon has reportedly expressed support for Kevin Warsh as the next Fed chair, according to the Financial Times. Dimon also noted that Hassett might be more inclined to cut rates in the short term. The Fed recently lowered its benchmark federal funds rate to a range of 3.5%-3.75%, a move Trump believes should be even lower.
Powell's term as Fed chair is set to expire in May. He has indicated his desire to leave the economy in a strong position for his successor.
Sources
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Trump says Kevin Warsh is at top of Fed chair candidate list, CNBC.
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Trump set to hold last interviews with Fed chair finalists, Yahoo Finance.
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JPMorgan's Dimon signals support for Kevin Warsh as Fed chair, FT reports, Yahoo Finance.
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