Trump Hesitates On Fed Chair Pick As Hassett Stays

President Donald Trump’s search for the next chair of the Federal Reserve took a dramatic turn on January 16, 2026, as he publicly signaled deep reluctance to nominate his top economic adviser, Kevin Hassett, for the coveted role. The announcement, delivered during a White House health care event, sent ripples through Washington’s political and financial circles, leaving the fate of the central bank’s leadership in flux just months before current Fed Chair Jerome Powell’s term ends in May.

Trump’s remarks were as candid as they were unexpected. Turning to Hassett in the audience, the president said, “You were fantastic on television today. I actually want to keep you where you are, if you want to know the truth.” According to Reuters, Trump continued, “Kevin Hassett is so good. I’m saying, ‘Wait a minute. If I move him — these Fed guys, certainly the one we have now, they don’t talk much. I would lose you. It’s a serious concern to me.’” The president then addressed his chief of staff, Susie Wiles, with a laugh: “We don’t want to lose him, Susie, but we’ll see how it all works out.”

Hassett, director of the National Economic Council and a fixture of Trump’s economic team since the first administration, has long been seen as a front-runner to succeed Powell. His fierce advocacy for Trump’s economic agenda and frequent appearances as the administration’s economic messenger on television have bolstered his standing. But Trump’s latest comments cast sudden doubt on Hassett’s prospects. As Politico reported, the president’s hesitation left some insiders declaring Hassett’s Fed chair bid “DEAD,” a sentiment echoed by former White House chief strategist Steve Bannon.

The shortlist for the role remains competitive. Alongside Hassett, former Fed board member Kevin Warsh, current Fed board member Christopher Waller, and BlackRock executive Rick Rieder are all considered serious contenders. Betting markets now favor Warsh, especially after Trump’s remarks. “The two Kevins are very good,” Trump told Reuters earlier in the week, referring to Hassett and Warsh. “You have some other good people too, but I’ll be announcing something over the next couple of weeks.”

Trump’s indecision comes at a particularly sensitive moment for the Federal Reserve. The central bank is facing two major legal challenges. First, the Supreme Court is scheduled to hear oral arguments next week in a lawsuit involving Fed board member Lisa Cook, who was fired by Trump last year. Second, the Justice Department has launched a criminal probe into the handling of a $2.5 billion renovation project at the Fed’s Washington, D.C., headquarters. The investigation, which centers on cost overruns and testimony by Fed Chair Jerome Powell before the Senate Banking Committee, has raised concerns among lawmakers about the politicization of the central bank’s operations.

Hassett has not shied away from addressing these controversies. Speaking on Fox Business Network’s “Mornings with Maria” on January 16, he said, “Jay is a good man — I expect that there’s nothing to see here, that the cost overruns are related to things like asbestos, as he says. But I sure wish they had been more transparent.” Four days earlier, Hassett told reporters, “I would expect that the markets would be happy to see that there’s more transparency at the Fed.”

The investigation into Powell has drawn criticism from both sides of the aisle. Powell has denied any wrongdoing, and several Republican senators, along with foreign economic officials and former U.S. government leaders from both parties, have lambasted the probe as an attempt to politicize sensitive monetary policymaking. Senator Thom Tillis of North Carolina, a key member of the Senate Banking Committee, has voiced particular concern about Hassett’s White House ties and stated that he would not vote to confirm any nominee to the central bank until the Powell investigation is resolved.

All this drama unfolds against the backdrop of Trump’s ongoing dissatisfaction with Powell’s tenure. Since returning to the presidency, Trump has regularly criticized Powell for not lowering interest rates enough, insisting that the next Fed chair must be someone who shares his view that borrowing costs should be lower. Hassett has supported many of these criticisms, aligning himself with the president’s push for cheaper credit to spur economic growth.

Despite the mounting uncertainty, Trump has promised to announce his pick for Fed chair soon. “I’ll be announcing something over the next couple of weeks,” he reiterated at the White House event. Yet, with the legal clouds over the Fed, political squabbles in Congress, and the president’s own reluctance to lose his top economic adviser, the path forward is anything but clear.

For Hassett, the sudden cooling of his candidacy is both a testament to his value within the administration and a reflection of the high-stakes political calculations at play. As The Hill noted, Hassett’s “fierce but friendly advocacy for Trump’s agenda made him a top candidate for the Fed nomination, but the president suggested Friday that it also made his adviser too valuable to send away.”

Meanwhile, the Federal Reserve’s leadership vacuum looms large. With Powell’s term ending in May and the institution embroiled in legal and political controversies, the decision over who will lead the world’s most influential central bank has rarely felt more consequential. The stakes are high not just for Washington insiders, but for global markets, investors, and ordinary Americans whose financial futures are shaped by the Fed’s policies.

As the drama continues to unfold, one thing is clear: Trump’s deliberations over the next Fed chair are about much more than monetary policy. They reflect the broader tensions of a presidency determined to leave its mark on every lever of economic power, even as it grapples with the realities of governance and the limits of loyalty.

With the president’s announcement expected in the coming weeks, all eyes remain fixed on the White House — and on Kevin Hassett, whose future now hangs in the balance, caught between the allure of the central bank’s top job and the gravitational pull of his current role as Trump’s economic confidant.

For the Federal Reserve, and for the country, the next move could shape the economic landscape for years to come.