Kevin Hassett Exits Federal Reserve Leadership Race—Trump’s Reaction Speaks Volumes
Another contender bites the dust in the high-stakes game of Fed chair musical chairs. Kevin Hassett, once a frontrunner, just stepped back from the race to lead the Federal Reserve. The real story? Donald Trump's notable silence.
The Non-Reaction Reaction
In Washington, what isn't said often screams louder than any press release. Trump's apparent indifference to Hassett's withdrawal sends a clear signal—the political calculus for the world's most powerful central bank is shifting. It's a classic D.C. maneuver: letting a candidate fade away without a fight often reveals more about backroom priorities than any public endorsement ever could.
Power Plays and Policy Pivots
The Fed's leadership isn't just about economics; it's a raw exercise in political power. A vacant seat or a withdrawn name creates ripples across global markets. Traders are left parsing silence for hints on future monetary policy—will the next chair be a hawk, a dove, or something entirely new? This uncertainty becomes its own kind of market stimulus, for better or worse.
The Cynical Take
Let's be real—this is less about finding the best economist and more about installing a reliable yes-man. The whole process often feels like watching a boardroom coup play out in slow motion, where the only thing more volatile than interest rates is the political loyalty of the appointees. It's enough to make you trust a meme coin's whitepaper more than a central banker's forward guidance.
What happens next in the Fed race will tell us everything about where the real power lies—and who's really pulling the strings behind the curtain of monetary policy.
Fed chair race narrows as Rieder gains late support
With Hassett out, the list is shrinking. It’s now seen as a four-man race. The names floating around are Christopher Waller, Kevin Warsh, and Rick Rieder.
Rick’s stock is rising fast. People familiar with the process say his nomination may have a better shot in the Senate. The idea is simple: he’s seen as easier to confirm, and in the current climate, that matters.
That climate, by the way, is now officially toxic. A criminal investigation has been opened into Jerome Powell. The case is about the huge costs tied to the remodel of the Fed’s Washington headquarters.
But everyone in D.C. knows what it’s really about. Powell refused to cave to Trump’s demand for lower rates. And now the Justice Department is coming after him.
Powell himself went public. In a video posted to the Fed’s site, he said: “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.”
The case relates to congressional testimony Powell gave on the cost overruns. The U.S. attorney for D.C., Jeanine Pirro, signed off on the subpoena.
Senate resistance grows as Powell and Cook face pressure
The whole thing has triggered real pushback, not from Democrats, but from inside Trump’s own party. Senator Thom Tillis, who sits on the Banking Committee, said any Fed nominee from Trump will now face even more scrutiny.
This is not the usual “lawfare” that Trump complains about. This time, the heat is coming from inside the GOP. And it might blow up the plan to replace Powell before his May 15 exit as chairman.
Even if Trump can’t fire Powell outright, he’s trying to change the makeup of the board. Under the 1913 law that created the Fed, governors serve 14-year terms, and they can only be fired “for cause.” That phrase has never really been defined. Powell can stay on the board until 2028 even if he loses the chair.
Meanwhile, Trump is also trying to remove Governor Lisa Cook over a separate accusation (mortgage fraud), which she denies. That’s turning into another legal fight. If Trump manages to push both Powell and Cook out, he could flip the balance.
Three of the current seven governors already lean toward his view of lower interest rates. Adding two more WOULD tilt the whole board.
The search for a new chair is being led by Bessent, who Trump says pulled his own name out of consideration. And Trump keeps saying publicly that he’s not behind the Powell investigation. But then again, in his speech at the Detroit Economic Club, he smiled and told the crowd, “That jerk will be gone soon.”
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