The chosen

The Trump administration, through Treasury Secretary Bessent is finalizing the list of candidates for the Fed chair job. From the list, one can only infer that what the president is looking for is someone loyal, that is able to go beyond statistics and models to justify what’s needed. And what’s needed will be determined by the president, for the most part. The independence of the Fed will be deemed secondary, because the U.S. economy is at a point where everybody has to push or pull in the same direction. And according to the chart below, by Polymarket, the chosen one appears to be Kevin Hasset. PHD in economics, much of Hassett’s pre-government career was spent at the American Enterprise Institute (AEI), a conservative think tank, where he served as an economist and as Research Director. He has written several books and papers, among them: Bubbleology: The New Science of Stock Market Winners and Losers (2002), Inequality and Tax Policy (co-edited, 2001), Toward Fundamental Tax Reform (co-edited, 2005), and contributions to The 4% Solution (2011). In the first Donald Trump administration (2017–2021), he served as the 29th Chairman of the Council of Economic Advisers (CEA), where he championed tax cuts, deregulation, and trade policies, Following Trump’s 2024 election victory, Hassett returned to the White House in January 2025 as the 15th Director of the National Economic Council (NEC), advising on broad economic strategy. He has been openly critic of J Powell’s stance on rates, pointing to a more aggressive policy when it comes to rate cuts to promote growth. What are the implications if he’s finally selected for the role? We will probably see higher inflation, and therefore higher long term yields, which may or may not be balanced by higher economic growth. The newly created Genesis project, signed by the president yesterday, is designed to support growth through investment in AI, which is a major bet for this administration. The economy will be run with a more aggressive approach, and that will likely imply higher volatility in markets, both in equities and fixed Income.

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