Will it be Kevin Warsh or Kevin Hassett?
The Wall Street Journal reports Trump Says He Is Leaning Toward Warsh or Hassett to Lead the Fed
In an interview with The Wall Street Journal in the Oval Office on Friday, the president said Warsh was at the top of his list. “Yes, I think he is. I think you have Kevin and Kevin. They’re both—I think the two Kevins are great,” he said. “I think there are a couple of other people that are great.”
Hassett has been increasingly viewed as the front-runner after Trump repeatedly teased in recent weeks that he had settled on his choice to lead the Fed, but Trump’s comments suggest Warsh remains solidly in contention.
During a 45-minute meeting with Warsh on Wednesday at the White House, the president pressed Warsh on whether he could trust him to support interest-rate cuts if he were chosen to lead the central bank, according to people familiar with the meeting. Trump, in the Journal interview, confirmed that reporting.
“He thinks you have to lower interest rates,” Trump said of Warsh. “And so does everybody else that I’ve talked to.”
Asked where he wants interest rates to be a year from now, Trump said, “1% and maybe lower than that.” He said rate cuts would help the U.S. Treasury reduce the costs of financing $30 trillion in government debt.
“We should have the lowest rate in the world,” he said.
“I won’t have anybody on the Federal Reserve that when you have good news, that means you automatically raise interest rates through the roof in order to kill inflation,” Trump said. “If you have lots of good news, they will do everything they can to stop it, because they’re so afraid of inflation.”
Kevin!
One Requirement for the Job
There is one and only one requirement for the job, any job within the administration, and every Trump appointment: If I can be blunt, Kiss Trump’s ass, regardless of economic consequences.
Warsh is trying to convince Trump he is up to the task.
I am sure Hassett is fully on board. But is Warsh a sincere ass kisser? I don’t know and I don’t think we will find out.
The Rate Cut Debate
Meanwhile, please note Fed Officials Spar Over Whether Rate Cuts Risk Credibility on Inflation
The central bank voted 9-3 Wednesday to cut its benchmark rate by a quarter point, to a range between 3.5% and 3.75%. Two voters favored no cut, and one preferred a larger reduction. It was the first time since 2019 that three policymakers had formally dissented.
One of this week’s dissenters, Kansas City Fed President Jeff Schmid, said Friday morning he opposed cutting rates because he doesn’t see evidence that interest rates are putting downward pressure on inflation by slowing economic activity, on balance.
“Right now, I see an economy that is showing momentum and inflation that is too hot, suggesting that policy is not overly restrictive,” he said. Schmid also dissented in October.
Chicago Fed President Austan Goolsbee, who also voted against cutting, suggested his disagreement centered more on tactical considerations. He backed cuts in September and October and said Friday he thought the Fed could continue lowering rates but didn’t want to move so aggressively because inflation has been stubborn.
“If we can just get the dust out of the air, fundamentally, rates can go down a fair amount from where they are today,” Goolsbee said at a conference in Chicago.
The central bank voted 9-3 Wednesday to cut its benchmark rate by a quarter point, to a range between 3.5% and 3.75%. Two voters favored no cut, and one preferred a larger reduction. It was the first time since 2019 that three policymakers had formally dissented.
One of this week’s dissenters, Kansas City Fed President Jeff Schmid, said Friday morning he opposed cutting rates because he doesn’t see evidence that interest rates are putting downward pressure on inflation by slowing economic activity, on balance.
“Right now, I see an economy that is showing momentum and inflation that is too hot, suggesting that policy is not overly restrictive,” he said. Schmid also dissented in October.
Chicago Fed President Austan Goolsbee, who also voted against cutting, suggested his disagreement centered more on tactical considerations. He backed cuts in September and October and said Friday he thought the Fed could continue lowering rates but didn’t want to move so aggressively because inflation has been stubborn.
“If we can just get the dust out of the air, fundamentally, rates can go down a fair amount from where they are today,” Goolsbee said at a conference in Chicago.
Recent divisions reflect a dilemma the Fed hasn’t faced in more than 15 years: stubborn inflation that calls for higher rates paired with a softening job market that suggests a need for lower rates. “So what do you do?” Powell said Wednesday. “You’ve got one tool. You can’t do two things at once.”
CME Fedwatch Odds
As of today, CME Fedwatch data shows there is a 75.6 percent chance the Fed stands pat in January.
I have no idea because we do not have enough data.
But the next meeting is not until January 28. By then we will have November and and December data.
The BLS will report December CPI data on January 13, and jobs data on January 9. Those two reports can dramatically change the odds.
Powell Blames Tariffs for Inflation, Says Job Growth Is Negative
On December 10, I reported Powell Blames Tariffs for Inflation, Says Job Growth Is Negative
In the press conference, Powell blamed tariffs and said the BLS overestimated jobs.
And in case you missed it, please note President Trump Promised a Manufacturing Boom. Where Is It?
The answer is China.
If this article does not tell you to buy gold mining stocks? Nothing will!
Trump is yelling from the rooftops that inflation is coming and the dollar is going the way of the Yen. possibly the Peso or heaven forbid the ~ Zimbabwe dollar, (replaced by Zig after 2024 collapse).<<<
In addition to lowering the interest rate, QT ended and QE has resumed to the tune of $40 billion per month. I watch liquidity for signs of economic stress or weakness…
““If we can just get the dust out of the air, fundamentally, rates can go down a fair amount from where they are today,”
“According to the interest rate fallacy, monetary policy is easy when interest rates are low and monetary policy is tight when interest rates are high”
Goolsbee is right. Tighten credit until interest rates are lower.
“Overall U.S. commercial banks: About ~3.3% (for Q3/September 2025). This is based on FDIC-reported data showing net interest margin at roughly 3.309% most recently.”
“Interest it pays the banks on reserve balances (IORB): 3.65%.”
So, there’s still not a lot of incentive for DFIs to buy securities or make loans.
Still think a US credit rating downgrade next year is lunacy?
You seem to be assuming the people at these credit agencies can just do the right thing without consequences/repercussions.
They’ve probably got dirt on the people who run the credit agencies. Or they will trump up some charges on their kids. Then, they will use that to control the people who work there.
“Gee, it’d be unfortunate if people found out you are secretly gay and have been leading a double life that your wife doesn’t know about.”
“Does your wife know about this affair you’ve been having with your secretary?”
“We’ve got your kid on drug possession with intent to sell. That’s 15-25 years in jail.”
exactly correct. we are in the night of the long knives………..we’ll devolve into secession. 50 state solution is on tap by jan 20 2029.
US bond becomes a junk bond in the hands of Pedo Pig.
Kevin Warsh or Kevin Hassett. THE TWO K’s.
Is THIS CHOICE the K-Shaped ECON that they keep talking about?
🙂
whoever it is PEDOTUS trump will control the fed and rates. we’ll be at zero rates by next july 4th………….empires do go broke. many ways to achieve it. “this time it’s different” is the greatest book on history of failures in all sorts of scenarios for the past 600 years. bond, currencies, r/e, wars………….i have faith the donald can go down in our history as our nero. his only goal is headlines. the policy does NOT matter one iota.
The next Fed Chairman will be getting a flaming bag of dog doo. Inflation is above target, unemployment is rising, and fewer basis points to start with. Now add to the mix the emergence of bond vigilantes. Both the 10 and 30 year US bond yields are higher than before Powell cut rates this week. The 30 year yield continued its move above the 200 day moving average.
The time for the least bitter pill was 4 years ago. Powell could have raised rates Volker style for a year and then lower rates slowly. Instead, interest rates rose so much for so long that they blew my former employer’s business model out of the water, and the entire research and development department was shut down 2 years ago. The bond market consolidation the past 3 years has not brought a lot of relief. Companies issued shares instead of borrowing, but many potential home buyers have been shut out of buying a house.
I’m in the Lyn Alden camp. Fiscal policy rules the day. Private credit creation right now domestically is less than the federal deficit. The Fed is important, still, but too me there most important role right now is to either support or push back against the excessive federal spending. Powell is the one that stopped Build Back Better in my opinion. People also don’t realize that the implementation of SOFR was significant. Powell got the transitory deal wrong, and fudged rates in 2018 but he still has come away positively in my hands. I don’t think these two Kevin guys can do what Powell did and will cowtow to Trump it seems. But then again if the goal is to make a weak FED so the treasury can absorb it, then this is a solid way to do so.
bessent will perhaps get the nod.
Are you saying Trump will tap Bessent? Ewwww
the pillow biter would love daddy donald to tap him.
Typical taco decision making; always waffling and compitulating.
Remember, the IMAGE is that they are “in control” and the reality is that the FED controls NOTHING. Listen to Jeff Snider.
Tell that to the LIBOR banks in London. Powell didn’t take crap from the ECB or London. Unlike all of his predecessors.