Hassett’s Message on Rate Cuts Is Clear

Kevin Hassett’s comments represent an alternative economic perspective to the Fed’s current policy stance. According to Hassett:

• Inflation is under control.

• The labor market remains strong.

• Conditions are suitable for a rate cut.

He believes that the Fed should take more decisive steps, especially considering global economic trends.

Hassett: “Fed official Waller and Trump are right about interest rates. There is no reason why the Fed shouldn’t cut rates.”

Why Is Powell Holding Back?

Fed Chair Jerome Powell, however, has a different outlook. Powell warns that external factors such as rising oil prices and new tariffs could drive inflation higher in the near future. In particular, the surge in energy prices is believed to put upward pressure on the Consumer Price Index (CPI).

Because of these concerns, the Fed is taking a cautious stance toward a potential rate cut in September. However, market expectations differ: According to CME Group data, investors see a 76% probability of a rate cut in September.

Global Trend: Other Central Banks Have Started Cutting Rates

Another point supporting Hassett’s view is the global approach of other central banks. Major institutions like the European Central Bank (ECB) and the Bank of Canada (BoC) have already begun reducing interest rates.

If the U.S. lags behind this trend, the dollar could strengthen further, which might harm the competitiveness of U.S. exporters. This strengthens Hassett’s message: “Now is the time to act.”

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Trump recently criticized the Fed once again, stating that it hasn’t acted quickly enough to cut interest rates. Following these statements, several names have begun to emerge in political and financial circles. So, who could replace Powell? Here are the leading names in the Fed chair race!

Who Will Be the Next Fed Chair?

1. Kevin Warsh: A Surprise Candidate

Former Fed governor Kevin Warsh is a strong contender whose name is frequently mentioned in Trump’s inner circle. Warsh has criticized the central bank, saying it has “strayed outside of its remit” and that the current economic problems are “largely self-inflicted.”

Although Warsh supports the independence of the central bank, he also noted that this independence is often used “as a shield when the Fed is criticized.” With his experience and alignment with Trump’s economic views, Warsh is currently seen as one of the strongest candidates.

2. Scott Bessent: One of Trump’s Favorites

Trump’s Treasury Secretary Scott Bessent is another rising name in the mix. Known for effectively implementing Trump’s vision on economic, tax, and trade policy, Bessent is increasingly considered a serious alternative for the Fed chair role.

Bessent currently plays a key role in U.S.-China trade negotiations and Trump’s broader economic reforms. Tim Adams, CEO of the Institute of International Finance, commented, “As someone who has the trust of the global financial community, Bessent is a natural candidate.” However, some experts highlight that Bessent’s expertise lies more in fiscal policy than in monetary policy.

3. Chris Waller: A Voice from Within the Fed

Current Fed governor Chris Waller is also among the candidates. In a recent interview with Bloomberg, Waller said that anyone taking the role of Fed chair should be prepared to face criticism. For Waller, the most important quality in a chair is the ability to protect the Fed’s independence from political influence.

Waller clearly stated his position by saying, “Are they going to come in and keep the tradition of central bank independence, making policy in a nonpolitical way? For me, that’s critical.”

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