Why Kevin Hassett Appears to Be Trump’s Pick for the Next Fed Chair

SPEAKER_1 (0:00)

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Sabrina Siddiqui (0:10)

President Trump appears to be closing in on his pick to lead the Federal Reserve.

Donald Trump (0:14)

I guess a potential Fed chair is here too. I don't know who's allowed to say that. Potential is a respected person that I can tell you. Thank you, Kevin.

Sabrina Siddiqui (0:25)

Plus, a Pentagon watchdog finds that Defense Secretary Pete Hegseth's use of the messaging app Signal violated department regulations. And President Trump is rolling back the rule that requires cars to get 50 miles a gallon. It's Wednesday, December 3rd. I'm Sabrina Siddiqi for The Wall Street Journal, filling in for Alex Osla. This is the PM edition of What's News, the top headlines and business stories that move the world today.

As the question of who the next Federal Reserve Chair will be looms large, the White House abruptly canceled interviews that were scheduled for this week with a group of finalists being considered for the job. The interviews are part of the formal process for choosing who succeeds Jerome Powell, whose term expires in mid-May. But President Trump has publicly said that he has already narrowed the list of potential Fed chairs down to a single pick. Nick Timiraos, The Wall Street Journal's chief economics correspondent, has the story. Nick, what, if anything, do the cancellation of these interviews signal about the process and President Trump's thinking?

Nick Timiraos (1:31)

Well, we don't know exactly why these interviews were canceled. It could be a scheduling conflict. But they were canceled on the same day that President Trump said, we were looking at a lot of candidates, but now it's down to one. And he was in a meeting yesterday that Kevin Hassett was at, and he said, oh, there's a potential Fed chair here. So he's sort of teasing this idea or allowing the public to run with it, that Kevin Hassett is going to be the next Fed chair. And Hassett makes sense in the standpoint that he checks a number of boxes that are going to be important to Trump. One is that he's somebody that the president trusts. He picked Jay Powell eight years ago, and he's been furious with his decision ever since.

Because he thinks Powell hasn't rewarded him with loyalty, and he doesn't want to make that mistake again. The second box that Hassett checks is that he's a conventional, credible, conservative economist. He's not going to spook bond markets that he's some kind of unqualified partisan. So that's why the betting markets believe that Hassett is going to be this pick.

Sabrina Siddiqui (2:39)

Hassett is currently the director of the National Economic Council and also served as an economic advisor during Trump's first administration. What else can you tell us about him and how Wall Street sees him?

Nick Timiraos (2:51)

Well, I think the question is going to be, which Kevin do we get? Before he went to work for Donald Trump and even through the first term, he said all the normal kind of predictable institutional establishment things. The Fed should be independent. You shouldn't try to fire the Fed chair. We should just let the Fed do its job. This year, he's taken, you could say, a more menacing tone towards the Fed, the institutional arrangement that we refer to as independence. He's attacked the Fed as being partisan. He says, we should have an independent Fed, but he suggested that it's the Fed that's changed and that they've become more partisan. So I think the question investors have is, what will Kevin Hassett actually be like if he's in this job?

Sabrina Siddiqui (3:35)

That was The Wall Street Journal's Nick Timiraos. Nick, thank you.

Nick Timiraos (3:38)

Thanks for having me.

Sabrina Siddiqui (3:43)

President Trump says he plans to lower fuel economy standards for cars in his latest push to relax regulations on the auto industry. The federal government will now require that cars average 34.5 miles a gallon by model year 2031, down from the standard of just over 50 miles a gallon set by the Biden administration. As fuel economy standards have increased over the years, they pushed automakers to make more fuel-efficient cars and encourage the rise of electric vehicles. The Trump administration says today's changes will make cars more affordable. This is the president speaking from the Oval Office.

Donald Trump (4:20)

We're protecting our auto workers and we're making it easier for every family to afford high quality cars.

Sabrina Siddiqui (4:26)

The auto and oil industries largely approve of the move, but environmental groups criticized it and argue that gas-guzzling vehicles are likely to increase demand for gas and drive up its price.