Kevin Hassett: I May Run for Fed Chair

Hassett Leaves the Door Open for Fed Chairmanship

Director of the U.S. National Economic Council Kevin Hassett announced that he would accept a nomination as Fed chairman if Jerome Powell is nominated when his term expires next year. Hassett stated that he shared this intention with President Donald Trump.

Interest Rate Expectations and Economic Assessments

Hassett indicated that he expects interest rates to drop by 25 basis points at the Federal Open Market Committee (FOMC) meeting scheduled for December 2023. However, he expressed his surprise that Powell did not make a more aggressive cut despite last year's government shutdown and better-than-expected inflation figures.

President Trump and Interest Rate Policies

Hassett stated, “I think the President believes there could be lower interest rates, and I agree with him on that.” He emphasized that there is sufficient justification for a 50 basis point cut, noting that every week the government was closed resulted in a loss of approximately $15 billion to the U.S. gross domestic product.

Recommendation for Fed Restructuring

Hassett expressed his intention to reorganize the research department within the Fed and invest in nonlinear time series models. He mentioned that he has "great respect" for Powell and conveyed that he is presenting a different approach than Trump.

Expectations for Change at Atlanta Fed

Meanwhile, Atlanta Fed President Raphael Bostic announced his plans to retire at the end of his current term in February 2024. It was reported that a search committee would be established to find his replacement, and if a new leader is not appointed by February 28, Cheryl Venable will serve as the interim president. The Atlanta Fed, which will not vote on interest rate decisions of the FOMC until 2027, indicates that Bostic's departure will have a limited impact on short-term policy changes.

Evercore ISI economist Marco Casiraghi assessed that Bostic's retirement decision will make the overall tone of the FOMC more dovish. Bostic was noted as one of several Fed officials under scrutiny for not adhering to the rules set by the central bank.