Wall Street moves to stop Trump from picking Kevin Hassett as next Fed chief — here's why

Core Viewpoint - Wall Street executives and corporate CEOs are making a final attempt to dissuade President Trump from appointing Kevin Hassett as the next chairman of the Federal Reserve, but they are not optimistic about their chances of success [1][2]. Group 1: Hassett's Qualifications and Support - Hassett is viewed favorably by Trump, who has a strong preference for him due to their long-standing relationship, with Hassett previously serving as head of the Council of Economic Advisers [2][3]. - He has a PhD in economics from the University of Pennsylvania and has experience in think tanks and the Federal Reserve [3]. Group 2: Concerns from Wall Street - Critics argue that Hassett lacks the independence that bond markets expect from a Fed chair, viewing him as too political and too willing to align with Trump's economic agenda [4][5]. - There are concerns that Hassett may prioritize growth and lower interest rates over controlling inflation, which is a critical aspect of the Fed's dual mandate [5][6]. - His credibility with the Federal Reserve staff is questioned, as he is perceived as a pawn of the White House, which could complicate his ability to implement necessary interest rate cuts [6][19]. Group 3: Potential Market Reactions - A significant reduction in short-term interest rates, as desired by Trump, could be interpreted by bond traders as inflationary, potentially leading to higher long-term interest rates [8]. - The impact of rising interest rates could make mortgages and loans less affordable, which may negatively affect the stock market, reminiscent of past market reactions to political decisions [10].