Kevin Hassett, director of the National Economic Council, has resigned, as has Kevin Warsh, former president of the Federal Reserve.
Reuters
Kevin Hassett has regained the lead in prediction markets betting on who President Donald Trump will nominate as the next Fed chairman, after briefly losing ground to former Fed director Kevin Warsh.
As for Carsi, traders on Tuesday valued Hassett’s odds of winning the nomination at about 53%, up from about 39% earlier in the day following reports of internal pushback from people close to President Trump. Mr. Warsh’s implied probability has fallen to about 33% from 46% earlier Tuesday.
The change appears to have come after Hassett expressed support for central bank independence on CNBC and said consensus-building was an important part of the job.
“The independence of the Federal Reserve Board is really, really important, and the voices of other people (on the Federal Open Market Committee) are important, too,” he said. “This means we need a consensus based on facts and data to drive changes in interest rates.”
Mr. Hassett’s odds quickly declined after renewed pushback from senior government officials with direct access to the president, people familiar with the matter said. Those advisers have expressed concern that Hassett, who currently chairs the National Economic Council, is seen as too close to President Trump.
Warsh previously served on the Federal Reserve Board from 2006 to 2011 and has been seen as a reliable asset for Republicans. Mr. Hassett has been a fixture on President Trump’s economic team throughout both terms, but some advisers now worry that his proximity could undermine the Fed’s institutional standing.
Late last week, the race to head the Federal Reserve got into high gear as President Trump brought new ambiguity to the campaign. Trump previously told reporters he already knew who he would choose to chair the Fed, but on Friday he told the Wall Street Journal that Warsh had emerged as his frontrunner.
