Next Fed Chair Faces Uphill Battle on Rate Cuts Despite Dovish Stance
Kevin Hassett emerges as the leading candidate to replace Jerome Powell as Federal Reserve chair in May, bringing a distinctly dovish approach to monetary policy. The former TRUMP economic advisor has repeatedly called for aggressive interest rate reductions, telling a Wall Street Journal forum this week there's "plenty of room" for cuts.
Yet the Fed's institutional structure may thwart Hassett's ambitions. The 12-member Federal Open Market Committee retains final authority over rate decisions, with several current members expressing skepticism about easing monetary policy too quickly. "The Chair does not have unbounded power," Deutsche Bank economists noted in a recent analysis.
The potential leadership transition comes at a delicate juncture for the central bank. Policymakers remain divided between combating persistent inflation and supporting employment growth - the dual mandate that has guided Fed decisions for decades.
