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].

Core Viewpoint - The potential appointment of Kevin Hassett as chair of the Federal Reserve by President Donald Trump may bring certainty to markets but could also lead to increased volatility [1] Group 1 - President Donald Trump is likely to choose Kevin Hassett as the next chair of the Federal Reserve [1] - The identification of the next central bank chief provides some level of certainty for market participants [1] - The announcement may also result in market volatility despite the certainty it brings [1]

Core Insights - The race for the next Federal Reserve chair is competitive, with Kevin Hassett, Kevin Warsh, and Chris Waller as leading candidates, all of whom have shown a focus on price stability while also responding to President Trump's demands for rate cuts [2][3][5][6] Candidate Profiles - **Kevin Hassett**: Currently the National Economic Council Director, he emphasizes Fed independence and sound monetary policies. He has criticized the Fed's past decisions and supports a significant rate cut in December [7][10][11] - **Kevin Warsh**: A former Fed governor, he has been critical of the Fed's current policies and argues for a reevaluation of inflation forecasts, suggesting that AI will positively impact productivity and reduce inflation [20][21][23] - **Chris Waller**: Currently a Fed governor, he supports rate cuts due to concerns about the job market and believes inflation is close to the Fed's target of 2% [12][13][14] Market Implications - The potential nomination of a candidate inclined towards lower interest rates could lead to a more dovish Federal Reserve, which may influence market expectations and economic conditions [26][27] - The emphasis on loyalty to President Trump as a criterion for the Fed chair raises concerns about the independence of the central bank, which could have significant implications for monetary policy and market reactions [27][28]

Core Viewpoint - The potential nomination of Kevin Hassett as the next Federal Reserve chair is seen as aligning closely with the administration's dovish stance on interest rates, which contrasts with the current consensus within the Federal Open Market Committee (FOMC) [1][2][5] Group 1: Nomination and Market Perception - Kevin Hassett is perceived by markets as a candidate who shares the administration's views on interest rates, which are more dovish compared to the current FOMC consensus [1][2] - The administration is likely to seek a candidate who is respected by markets and maintains central bank independence while also aligning with the president's policies [5][6] Group 2: Challenges and Considerations - If Hassett is appointed, he will face challenges in convincing other FOMC members to adopt his views on lowering interest rates, as the committee operates through a democratic process [4] - The administration's goal of lowering interest rates is seen as a potential constraint on the economy, raising questions about the feasibility of achieving this objective without triggering inflation concerns [6][7] - There is a risk that even if the Fed funds rate decreases, longer-term Treasury yields could rise due to market concerns about inflation and credibility, indicating that rate cuts may not lead to lower long-term yields [8]

Core Viewpoint - U.S. Treasury Secretary Scott Bessent anticipates that President Trump will announce the new Federal Reserve chair by the holiday season, indicating progress in the selection process [1][2]. Group 1: Federal Reserve Chair Succession - Bessent is leading the search for a successor to current Chair Jerome Powell and has one interview remaining [2]. - There is a strong possibility that an announcement will be made before Christmas, although the final decision rests with the President [2]. - Trump has expressed a desire to fire Powell and has encouraged Bessent to influence the Fed to lower interest rates [2][3]. Group 2: Monetary Policy Context - Bessent noted that monetary policy has become increasingly complex, suggesting that it involves more than just cutting interest rates [3]. - Trump humorously remarked about the urgency of addressing monetary policy issues, indicating the pressure on Bessent to deliver results [3].

Core Points - Former U.S. Federal Reserve Governor Larry Lindsey has withdrawn from consideration for the position of Fed chair, citing a desire to maintain his current lifestyle [1] - Lindsey was among the candidates being interviewed by Treasury Secretary Scott Bessent as part of the selection process to replace current Fed Chairman Jerome Powell, whose term expires in May [2]