And now that Jerome Powell’s term as Federal Reserve chairman is set to expire in May, the speculation heats up. Now, everyone is abuzz about who might replace him. Former CEA Chair Kevin Hassett and current Fed governor Christopher Waller are two of the apparent frontrunners. Both have emerged as hugely consequential figures in the intellectual life of right-wing economics. Their qualifications and personal connections to former President Donald Trump help shape their candidacies in important ways.
Kevin Hassett, a long-time conservative economist, was one of Trump’s top economic advisers in the administration. As such, many are looking at him as a prime candidate to replace Powell. After having served previously as chair of the White House Council of Economic Advisers, he now runs the National Economic Council. Hassett has a very impressive background, but his prospects for getting that key role diminished significantly since early December. This has resulted in an increasing doubt about his chances.
Wall Street traders have picked Hassett as the frontrunner for the position. They demonstrate deep confidence in his capabilities and his character. Recent changes in prediction markets have revealed a turn in favor of Christopher Waller. He was in and out of second place ahead of Hassett, but the Kansas native Wong fell behind Hassett again almost immediately.
Christopher Waller, 55, is currently a monetary policy fellow at the Hoover Institution. From his resume, it’s immediately obvious that he knows what he’s doing. Yet that’s exactly what he’s done by sitting on the board of UPS, further enriching his distinguished resume. Waller was previously considered for the Fed chair position during Trump’s first term, which aligns him closely with the former president’s economic policies and vision. Trump has praised Waller, stating, “he’s a man who’s been there a long time,” emphasizing his familiarity with the inner workings of the Fed.
While Waller’s credentials are strong, he lacks the personal ties that could enhance Hassett’s and Andrew Warsh’s chances with Trump. This lack of relationships will likely limit Waller’s ability to make the most out of his experience and knowledge in this new political reality.
Yet Hassett’s close relationship with Trump is still a big wild card in his candidacy. Trump himself has praised both Hassett and Waller, claiming, “I think the two Kevins are great. On the surface, this endorsement appears to indicate that Trump still has outsize influence over Federal Reserve appointments. Additionally, it highlights just how important personal connections are to this selection process.
Kevin Hassett has articulated his views on interest rates and economic dynamics, stating, “The way you’ve got to drive interest-rate movements is with consensus based on the facts and the data.” His focus on data-driven decision-making, true to the Fed’s mandate to foster stable prices and maximum sustainable employment, is refreshing.