The battle to determine the next Chair of the U.S. Federal Reserve is heating up, with two Republican contenders—Kevin Hassett and Kevin Warsh—emerging as leading candidates. As Jerome Powell’s term approaches its conclusion in May 2025, the decision carries significant implications for the U.S. economy and monetary policy.
Kevin Hassett: Trump’s Loyal Economist
Kevin Hassett, a 63-year-old Ph.D. economist, has a long history with the Federal Reserve and President $1 Trump. He worked at the Fed during the 1990s and became a key figure in Trump’s economic advisory team during his presidency. After serving in the Trump administration, Hassett joined a private-equity firm founded by Trump’s son-in-law, Jared Kushner. His deep ties to Trump’s inner circle have positioned him as a strong contender for the Federal Reserve’s top position.
Hassett has recently become an outspoken critic of Jerome Powell’s leadership. In a television interview in June 2025, he accused Powell of aligning with Democratic leaders, stating that Powell’s decisions were politically motivated to favor individuals like Vice President Kamala Harris and Senator Elizabeth Warren. According to Firstpost, Hassett has met with Trump at least twice in recent months to discuss the Fed chairmanship, signaling his serious interest in the role.
The White House, through spokesman Kush Desai, reiterated Trump’s stance on the importance of aligning monetary policy with the administration’s pro-growth agenda. “President Trump has been clear about the need for the Federal Reserve’s monetary policy to complement the Administration’s pro-growth agenda,” Desai stated.
Kevin Warsh: The Outsider with Establishment Ties
Kevin Warsh, a 55-year-old former Federal Reserve governor and adviser to President George W. Bush, represents a stark contrast to Hassett. Known for his cautious stance on monetary policy, Warsh has been critical of Trump’s trade policies in the past, warning in 2018 that tariffs could harm the U.S. economy. His more measured approach to interest rate cuts and his relative distance from Trump’s core advisory network have made his candidacy less appealing to Trump loyalists.
Despite these challenges, Warsh has influential connections. He is married to the daughter of billionaire Ronald Lauder, a longtime Trump acquaintance, and maintains a close friendship with Treasury Secretary Scott Bessent. According to The Wall Street Journal, Bessent’s endorsement could play a pivotal role in Warsh’s bid for the position. However, Warsh’s credibility has been questioned, particularly due to his perceived lack of alignment with Trump’s economic priorities.
Warsh has also proposed a unique policy approach, suggesting that the Fed could lower interest rates if it reduced its $6.2 trillion balance sheet of Treasuries and mortgage-backed securities. This strategy highlights his willingness to innovate but may not align with Trump’s explicit preference for aggressive rate cuts.
Trump’s Vision and the Stakes Ahead
President $1 Trump has made it clear that he expects the next Federal Reserve Chair to pursue more aggressive interest rate cuts. This marks a shift from his initial approach when appointing Jerome Powell in 2018. Trump has hinted at the possibility of placing Hassett on the Federal Reserve Board early next year, a move that could provide flexibility in elevating him to the chairmanship later.
According to CNBC, Trump has also floated the idea of appointing current Treasury Secretary Scott Bessent to simultaneously serve as Fed Chair, although the seriousness of this suggestion remains unclear. The decision will ultimately shape the trajectory of U.S. monetary policy at a time of economic uncertainty, with inflation and unemployment remaining critical concerns.
Both Hassett and Warsh bring distinct perspectives and approaches to the role, reflecting broader debates within Republican economic policy. Hassett’s alignment with Trump’s agenda and Warsh’s establishment credentials highlight the ideological tensions at play.
Conclusion
The impending decision on Jerome Powell’s successor is more than a matter of leadership; it is a litmus test for the future direction of U.S. economic policy. As the race narrows between Kevin Hassett and Kevin Warsh, the stakes couldn’t be higher for the Federal Reserve and the broader American economy.