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<\/p>\nWhere once Hassett, then regarded as a mainstream economist, advocated a carbon tax on coal and petrol and was pro-immigration and anti-protectionism, now he echoes Trump\u2019s aversion to \u201cgreen\u201d policies (he, too, lambasts wind turbines for killing birds), is an enthusiastic supporter of the administration\u2019s harsh treatment of immigrants and of Trump\u2019s tariffs.<\/p>\n
Like Bessent, he says an economic bonanza from the whirlwind of the administration\u2019s policies, particularly the tariffs and Trump\u2019s One Big Beautiful Bill, with its tax cuts for the wealthy and cuts to health and other services for the not-so-wealthy, is just over the horizon.<\/p>\n
US government deficits and debt, Hassett has claimed, are declining because of Trump\u2019s tariffs.<\/p>\n
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Jerome Powell may make life difficult for Trump by staying on the Fed\u2019s board after his term as chair ends. Credit: AP<\/p>\n
The deficit has reduced, from $US1.82 trillion ($2.8 trillion) in the 2023-24 financial year under Joe Biden, to $US1.8 trillion. Government debt, however, has risen from $US36.2 trillion at the end of last year to $US38.1 trillion this year and is still climbing, despite the tariff revenues. The administration never lets the facts get in the way of the story.<\/p>\n
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Hassett fits Trump\u2019s bill for the next chair of the Fed better than any of the other candidates and it will be Trump who makes the final call on who is presented to the Senate for confirmation.<\/p>\n
That he is favoured by betting markets and Fed watchers and those closest to the administration doesn\u2019t mean his appointment is inevitable, however.<\/p>\n
As White House spokesperson Karoline Leavitt said this week: \u201cNo one really knows what President Trump is going to do until he does it.\u201d<\/p>\n
What we do know is that the next Fed chair will only be chosen if they agree to do what Trump wants, which means he\u2019ll expect them to get the Fed to slash interest rates. He will also want them to shake up the Fed and its processes, which most of the candidates have signalled they would.<\/p>\n
Whether they\u2019d be prepared to do to the Fed what the administration has done to other key US agencies like the Department of Justice \u2013 purging the existing staff, replacing them with MAGA people and making it subservient to Trump\u2019s whims \u2013 is a more open question, although Hassett, the closest of the candidates to Trump and the Trumpist agenda, might be more willing to pursue that objective than the others.<\/p>\n
Powell\u2019s term as the Fed\u2019s chair doesn\u2019t end until next May, but his preferred successor will be nominated well before then \u2013 Bessent has signalled that it will be before the end of the year \u2013 because the administration believes the confirmation process for such a powerful and sensitive position could be protracted.<\/p>\n
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Sharemarkets would welcome Hassett\u2019s appointment but bond investors wouldn\u2019t be quite as enthusiastic. Credit: Bloomberg<\/p>\n
A chairman-elect, waiting in the wings, could also put pressure on the Fed\u2019s board and members of the 12-person committee that actually sets US monetary policy, the Federal Open Market Committee (FOMC), to fall more into line with Trump\u2019s wishes.<\/p>\n
Hassett, if he is Trump\u2019s choice, would, of course, be only one of seven Fed governors, albeit the first among equals, and only one of the 12 FOMC\u2019s voting members. (There are another seven regional Fed bank presidents who attend and participate in meetings, but don\u2019t vote.)<\/p>\n