The race to lead the Federal Reserve has taken on the tone of a reality show. Two Republicans are competing for the most influential economic post in the world.
One has built a reputation on loyalty and adaptability. The other carries the weight of elite experience and a record of inflation-wary policy. Behind the scenes, the US President is evaluating them.
This is not just a contest between two men. It’s a signal that America’s central bank is once again becoming political terrain. The outcome may determine how independent the Fed remains in the years ahead.
The leading candidate: Who is Kevin Hassett?
Kevin Hassett is a Ph.D. economist and former Chair of Trump’s Council of Economic Advisers. He is also the co-author of the now infamous Dow 36,000, which was written in 1999.
Hassett has spent the better part of the last decade orbiting Trump, shaping economic talking points, and increasingly aligning his views with Trump’s instincts.
Over the past year, he has transformed from a measured economist into a sharp critic of Jerome Powell.
Hassett accused the current Fed Chair of working “hand-in-hand with Democrats,” suggesting Powell cut rates in 2024 to benefit Kamala Harris.
Of course, the timing was strategic. It came just as Hassett re-entered Trump’s inner circle.
Hassett has the profile Trump tends to favor. He speaks simply, stays on message, and has shown a willingness to adjust his views to match the political moment. He was once a defender of Fed independence. Now he is making the case that the central bank has become partisan and needs new leadership to align with the president’s agenda.
He also ticks the experience box. He has worked at the Fed before, chaired Trump’s Council of Economic Advisers, and now holds a position at a private-equity firm launched by Jared Kushner. That history matters. In Trump’s second term, trust and familiarity are the currency that counts.
The reality however, is that Hassett is not a central banker. He’s an economist-turned-strategist who has learned that loyalty and narrative control matter more in Trump’s second-term calculus than technical chops.
His rise signals a Fed where the Chair could serve not as a steward of macroeconomic stability, but as an amplifier of the White House agenda.
The Establishment Hawk: Kevin Warsh
Kevin Warsh has long wanted the Fed job. He was a Fed governor under George W. Bush and was considered for the Chair in 2017 before Trump chose Powell instead.
Warsh has historically been a hawk, suspicious of quantitative easing and reflexively anti-inflation. This makes him an awkward fit for Trump’s preference for cheap money to fuel growth, debt-fueled stimulus, and rising asset prices.
As a market veteran, he’s also part of America’s financial elite, with deep ties to Wall Street and a direct link to billionaire Ronald Lauder, his father-in-law.
But that elite pedigree is now his biggest liability. Trump has made a political career out of distrusting the establishment.
Warsh’s support for free trade and his past criticism of Trump’s tariffs have not been forgotten.
To stay relevant, he has tried to rebrand. He now argues that the Fed can cut rates more aggressively if it also shrinks its $6.2 trillion balance sheet. It’s a hawk’s compromise.
He is still in the running, helped by his personal relationship with Treasury Secretary Scott Bessent. Warsh also looks the part.
He is articulate on TV and fits the image of a central banker. That may give him an edge with Trump, who values optics as much as policy.
The reality is that Warsh is trying to win over a populist president by appealing to his inner Wall Street.
But Trump doesn’t trust the elite circles Warsh moves in, and may see him as too independent, too polished, too Bush-era.
What Trump really wants from the Fed
Trump’s view of the Fed has always been transactional. In 2018, he picked Powell over Janet Yellen, believing Powell would keep rates low. That didn’t happen.
Now, with US debt at $37 trillion and interest payments climbing past $1 trillion per year, Trump wants a Chair who will deliver faster, deeper cuts.
In recent weeks, Trump has told advisers that rate cuts will be a condition for the next Fed chair. This is a departure from his first term, where he publicly pressured Powell but stopped short of setting preconditions.
Trump wants the Fed to absorb the economic risks of rising deficits while he focuses on growth and reelection.
That context makes Hassett’s rise more understandable. He doesn’t just agree with Trump’s goals. He has shown he is willing to build the intellectual framework to justify them.
Is independence at the Fed now over?
The idea of an independent central bank has always been more theory than practice. But the gap between the ideal and the reality has rarely been this wide.
Trump has floated the idea of appointing Scott Bessent to serve as both Treasury Secretary and Fed Chair. Even if that doesn’t happen, the fact that it was discussed tells you how the institution is being viewed.
Another possibility is that Trump appoints Hassett to the Fed Board in early 2026 and then promotes him to Chair once Powell’s term ends. That route would allow Trump to avoid Senate confirmation battles in an election year while still installing a loyalist at the top of the Fed by mid-2026.
The strategy is deliberate. Trump is laying the groundwork for a Fed that no longer acts as a brake on fiscal expansion. In this model, monetary policy becomes a tool to extend and amplify executive power, instead of counteracting it.
Who is likely to win and what’s next?
Kevin Hassett has the inside track. He’s Trump’s man. He’s already morphing into what Trump wants him to be. But the cost will be high.
If appointed, Hassett’s tenure may mark the formal end of the Fed’s political independence. Rate decisions will no longer be seen as reflections of data or macroprudence, but of partisan alignment.
That may win short-term growth, but it undermines the Fed’s global credibility, as well as long-term economic stability.
Warsh, by contrast, is too much of a throwback. A Bush-era free trader with Goldman Sachs polish and a hawkish streak, he doesn’t fit the Trump 2.0 ethos.
Ultimately, this is not “two Kevins competing to lead the Fed.” It’s one Kevin reshaping himself to serve the court, and another trying to prove he’s still relevant.
The Fed chair fight isn’t about economics. It’s about power. And in Trump’s world, loyalty always trumps legacy.
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