{"id":235286,"date":"2025-11-28T09:45:00","date_gmt":"2025-11-28T14:45:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=235286"},"modified":"2025-12-01T05:14:41","modified_gmt":"2025-12-01T10:14:41","slug":"hassett-emerges-as-trumps-top-fed-pick-heres-what-a-dovish-shift-could-mean-for-markets","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/hassett-emerges-as-trumps-top-fed-pick-heres-what-a-dovish-shift-could-mean-for-markets\/","title":{"rendered":"Hassett Emerges As Trump&#8217;s Top Fed Pick \u2014 Here&#8217;s What A Dovish Shift Could Mean For Markets"},"content":{"rendered":"\n<p><strong>Kevin Hassett<\/strong>&nbsp;has emerged as the clear frontrunner to replace<strong>&nbsp;Jerome Powell<\/strong>&nbsp;as Federal Reserve chair next May, a shift that could reshape U.S. monetary policy and affect global markets, particularly if Hassett brings a more&nbsp;<a href=\"https:\/\/www.benzinga.com\/topic\/federal-reserve\" target=\"_blank\" rel=\"noreferrer noopener\">dovish stance as expected.<\/a><\/p>\n\n\n\n<p>A Bloomberg report earlier this week sent predictive betting markets into a frenzy, with Polymarket odds of Hassett becoming the next Fed chair jumping from 25% to 57%.<\/p>\n\n\n\n<p>That puts him well ahead of Fed Governor&nbsp;<strong>Christopher Waller<\/strong>, the second-most-likely contender at 26%, who has consistently voted for rate cuts since diverging from the broader Fed board view last July.<\/p>\n\n\n\n<p>While the White House has called the discussion speculative, Hassett\u2019s rise is unmistakable\u2014and investors are already taking notice.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-hassett-thinks-about-tariffs-and-inflation\">What Hassett Thinks About Tariffs and Inflation<\/h2>\n\n\n\n<p>Hassett, currently serving as Director of the National Economic Council, has challenged conventional Wall Street narratives on inflation, particularly regarding Donald Trump&#8217;s tariff policies.<\/p>\n\n\n\n<p>In a recent Bloomberg interview, he cited a San Francisco Federal Reserve paper that reviewed a century of trade policy and concluded tariffs tend to have a deflationary\u2014not inflationary\u2014impact.<\/p>\n\n\n\n<p>\u201cWall Street has been quite wrong on their forecasts of inflation surge, which did not happen,\u201d Hassett said.<\/p>\n\n\n\n<p>\u201cWe\u2019re on track to hit 2.9% or 3% [core PCE inflation] at the end of this year.\u201d The PCE, or Personal Consumption Expenditures Price Index, is the Fed\u2019s preferred inflation gauge.<\/p>\n\n\n\n<p>Hassett supports the idea that tariffs act as a demand-side shock, cooling spending and thus price growth\u2014an argument that dovetails with his broader reputation as a proponent of looser monetary policy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-markets-could-react-to-a-hassett-appointment\">How Markets Could React To A Hassett Appointment<\/h2>\n\n\n\n<p>Tiffany Wilding, economist at Pacific Investment Management Co., said Hassett is perceived as the candidate most aligned with the Trump administration&#8217;s views on interest rates.<\/p>\n\n\n\n<p>&#8220;He&#8217;s clearly more dovish than the consensus on the committee right now,&#8221; Wilding said in a recent interview, noting that while Powell&#8217;s term as chair ends in May 2026, Trump could install Hassett sooner through the expiring&nbsp;<strong>Steve Miran<\/strong>&nbsp;seat as early as January 2026.<\/p>\n\n\n\n<p>But even if appointed, Hassett would need to convince other members of the Federal Open Market Committee (FOMC) to support any aggressive push for rate cuts.<\/p>\n\n\n\n<p>&#8220;The committee is a democratic process,&#8221; Wilding said. &#8220;He will have to have some intellectual heft in terms of convincing the others on the committee.&#8221;<\/p>\n\n\n\n<p>According to Wilding it is no guarantee that Powell will leave the Fed board after stepping down as Chairman in May.<\/p>\n\n\n\n<p>She warned that Fed efforts to push rates too low, too fast, could raise concerns about the long-term credibility, potentially steepening the yield curve if long-dated Treasury yields rise on inflation fears.<\/p>\n\n\n\n<p>Matthew Ryan, head of market strategy at Ebury, said the news may trigger a further decline in the U.S. dollar.<\/p>\n\n\n\n<p>&#8220;Hassett is widely regarded as the most dovish candidate currently in the running\u2026 having previously voiced a preference for a much lower fed funds rate,&#8221; Ryan said.<\/p>\n\n\n\n<p>Though the dollar\u2019s move has been &#8220;relatively contained so far,&#8221; he warned that it could accelerate as Powell&#8217;s departure date draws closer.<\/p>\n\n\n\n<p>David Morrison, senior market analyst at Trade Nation, added that Hassett&#8217;s dovish views could support further monetary easing, something that may concern bond investors wary of reaccelerating inflation.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted November 28, 2025 &#8211; <a href=\"https:\/\/www.benzinga.com\/markets\/economic-data\/25\/11\/49113424\/kevin-hassett-trump-fed-chair-pick-jerome-powell-monetary-policy-market-impact-reactions\">Hassett Is Trump&#8217;s Top Pick As Fed Chair: How Could Markets React? &#8211; StreetTRACKS Gold Shares &#8211; Benzinga<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kevin Hassett has emerged as the clear frontrunner to replace Jerome Powell as Federal Reserve chair next May, a shift that could reshape U.S. monetary policy and affect global markets, particularly if Hassett brings a more dovish stance as expected.<\/p>\n","protected":false},"author":1128,"featured_media":32573,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[18,6,8,9,26,3],"tags":[],"contributors-categories":[13584],"class_list":{"0":"post-235286","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-macro","8":"category-north-america","9":"category-region","10":"category-securities","11":"category-text-articles","12":"category-traders-insight","13":"contributors-categories-benzinga"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Hassett Emerges As Trump&#8217;s Top Fed Pick \u2014 Here&#8217;s What A Dovish Shift Could Mean For 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