Trump’s Hesitation on Fed Pick Rattles Markets as Dollar Recovers
Financial markets reacted sharply to President Trump's comments about retaining Kevin Hassett at the National Economic Council rather than appointing him as Federal Reserve chair. The dollar pared losses while equities turned negative following the remarks during a WHITE House healthcare event.
Treasury yields climbed five basis points to 3.61% - the highest level since the Fed's December rate cut - as traders scaled back expectations for multiple 2026 rate reductions. Short-term rate futures now price in fewer than two quarter-point cuts this year.
"I actually want to keep you where you are," TRUMP told Hassett, citing concerns about losing his economic advisor to the traditionally tight-lipped Fed. The administration seeks a rate dove to replace Jerome Powell, with Hassett previously seen as sharing Trump's accommodative policy vision.
Market moves underscore the outsized influence of Fed personnel decisions under the current administration. The nomination process faces additional hurdles in the Senate, where Banking Committee member Thom Tillis has expressed reservations about potential candidates.
