Hassett's Fed chair candidacy received pushback from high-level people close to Trump, sources say

Core Viewpoint - Kevin Hassett's candidacy for the Federal Reserve chair has faced unexpected resistance, impacting his perceived chances against former Fed Governor Kevin Warsh [1][6]. Group 1: Candidacy Dynamics - Hassett was initially viewed as the frontrunner to replace Jerome Powell, but concerns about his closeness to President Trump have emerged [2][5]. - Trump's recent comments have shifted the focus to Warsh, who is now seen as a strong contender alongside Hassett [3][4]. - As of Monday, Hassett holds a 51% chance of being selected, down from over 80% earlier in December, while Warsh's odds have risen to 44% from around 11% [4]. Group 2: Market Reactions - The market's perception of Hassett has changed due to fears that he may be too aligned with Trump, potentially leading to a backlash in the bond market [6]. - Concerns have been raised that if Hassett is viewed as insufficiently aggressive in managing inflation, long-term yields could rise [6]. Group 3: Fed Independence - In response to criticism, Hassett emphasized the importance of Fed independence in a recent interview, stating that the Fed's role is to work with the Board of Governors to reach a consensus on interest rates [7]. - He clarified that the president's opinions should not carry the same weight as those of voting central bank members, indicating a commitment to data-driven decision-making [8].