Hassett likely to be Trump's pick for Fed chief, though Warsh is more qualified, CNBC survey finds
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The NEC director firmly led when asked who the president will choose from among 11 names being considered.
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August 20, 2025
02:21 PM
CNBC
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White House economic adviser Kevin Hassett speaks next to U.S
President Donald Trump in the Oval Office of the White House in Washington, D.C., U.S., March 7, 2025
Leah Millis | ReutersPresident Donald Trump will tap his top economic advisor Kevin Hassett to be the next Federal Reserve chair, according to respondents to a special Jackson Hole Edition of the CNBC Fed Survey
But when asked who the president should pick, Hassett ranked a more distant fourth.Hassett, the director of the National Economic Council, firmly led the pack when asked who the president will choose from among 11 names currently being considered
He was ed by Fed Governor Christopher Waller and former Fed Governor Kevin Warsh.But when asked who the president "should" pick, Warsh took the No. 1 spot, closely ed by Waller and former St
Louis Fed President James Bullard
Fed Vice Chair for Supervision Michelle Bowman was in fifth after Hassett."I think that Trump's familiarity with (Hassett) in the job that he did during the pandemic makes him a high candidate for Trump, who appreciates and awards loyalty," said Richard Steinberg, senior global market strategist with Focus Partners Wealth.While maintaining that Hassett is qualified, Allen Sinai of Decision Economics said he's concerned Fed independence if he gets the job."The of low interest rates for political reasons — a very strong view and push by the Trump administration — is a macro risk if it is seen in as a takeover by the administration," Sinai said.In the survey, 41% of respondents think the next Fed chair will conduct monetary policy independently of the president and 37% said it would be in coordination; 22% were unsure.Zoom In IconArrows pointing outwardsCNBC Fed SurveyTrump has campaigned hard for the Fed to cut rates, repeatedly insulting current Chair Jerome Powell, but Powell and the Federal Open Market Committee have so far resisted because of concern over potential inflation from tariffs.Bowman and Waller both dissented in July in favor of a rate cut.Survey respondents see two rate reductions this year from the Fed --- in September and December --- but also high inflation.The forecast for the consumer price index 12-month inflation rate remains at around 3% this year and 2.9% in 2026, suggesting the Fed will have to deal with above-target inflation for a while
Nearly two-thirds of respondents believe "substantial" impacts from tariffs on inflation are yet to come."The Fed is caught between a rock and two hard places," said Richard Bernstein, CEO of Richard Bernstein Advisors. "Political pressure to cut rates and fiscal stimulus coming vs. the strength in the leading indicators of employment and inflation."As a result, Powell may not be as dovish rate cuts as hope in his Jackson Hole, Wyoming, speech
The Fed gathers each August for a symposium at which there are no votes but the chair traditionally ders a keynote speech that often has indicated what's ahead.Almost 70% of respondents think the Fed chair will be neutral in his s with 14% believing he will be dovish
Another 14% think he won't even discuss monetary policy or the economic outlook.Zoom In IconArrows pointing outwardsCNBC Fed Survey"Powell's s at Jackson Hole may be more balanced than the market is currently anticipating as he needs to weigh both downside risks to employment and upside risks to inflation," said Douglas Gordon, managing director at Russell Investments.Powell could discuss the Fed's effort to revisit its long-term strategy, with some expectation he addresses the Fed's controversial average inflation targeting.Respondents are divided over how to fix the central bank or whether it needs fixing at all
Just 11% say the Fed cess of making monetary policy needs major reforms with 85% saying it needs either modest or little to no reform.On specific issues, a 41% plurality say the Fed should get rid of the dot plot where central bank officials anonymously indicate individual forecasts for the funds rate
But 37% say keep it as is, with another 19% saying it should be kept with individual forecasts linked to the rate outlook.When it comes to the 2% inflation target, 52% want to retain it but 44% want the Fed to adopt a range from 1.4% to 2.7%.A 44% plurality want to eliminate the Fed's average inflation targeting, while 37% want to keep it.In average inflation targeting, the Fed takes into consideration prior misses in hitting its target, and could tolerate higher inflation for a while to account for inflation having run below target in previous years
Some have said this led the Fed to be more tolerant of inflation during the pandemic and slowed its decision to tighten policy.Don’t miss these insights from CNBC Morgan Stanley says nu power is gaining momentum, recommends these stocksWells Fargo hikes S&P 500 target as U.S. tariffs get delayed againMorgan Stanley maintains bullish stance on Nvidia heading into earnings, raises price targetWhy UBS just raised its gold forecast again as the precious metal hovers near record high
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