Kevin Hassett, a leading contender for the next chair of the U.S. Federal Reserve, publicly defended the central bank's independence from political pressure during a Sunday interview on CBS News' Face the Nation. Hassett, responding to concerns about potential influence from President Donald Trump, stated, "No, no, he would have no weight. It's just his opinion matters if it's good, you know, if it's based on data." He emphasized that any policy argument would be judged on its merits by the 12 voting members of the Federal Open Market Committee (FOMC).
The race to succeed current Chair Jerome Powell has narrowed significantly. On Friday, Trump told The Wall Street Journal that the competition was down to two frontrunners: Hassett and former Fed governor Kevin Warsh. "I think you have Kevin and Kevin. They're both — I think the two Kevins are great," Trump said. An official announcement on the appointment is expected in mid-January.
Prediction markets have closely tracked the shifting odds. Earlier in December, platforms like Kalshi and Polymarket showed Hassett with probabilities as high as 85%. Following Trump's public praise of Warsh, those odds declined. At the time of reporting, Hassett led on Polymarket with a 52% probability, while Warsh followed at 39%.
In the same Wall Street Journal interview, Trump argued that the next Fed chair should consult with him on interest rate decisions, stating, "Typically, that's not done anymore. It used to be done routinely. It should be done. I don't think he should do exactly what we say. But certainly we're — I'm a smart voice and should be listened to." He also indicated a desire for further rate cuts in 2026.
This political maneuvering unfolds against the backdrop of recent monetary policy action. Last Wednesday, the Federal Reserve cut interest rates by 25 basis points, bringing the target range to 3.5%–3.75%. Despite this easing, cryptocurrency markets remained largely flat in the immediate aftermath. Chair Jerome Powell noted the challenging policy environment, saying, "in the near term, risks to inflation are tilted to the upside and risks to employment to the downside... There is no risk-free path for policy." The crypto market appears to be in a wait-and-see mode, anticipating further clarity on the future direction of U.S. monetary policy and its leadership.
