Bond market participants in the US issued serious warnings to the Treasury Department regarding the possibility of Kevin Hassett, Director of the United States National Economic Council, being appointed as FED chairman in 2026.
Investors are concerned that Hassett is being overly aggressive in cutting interest rates to appease President Donald Trump, according to interviews reported by Bloomberg.
In November, during consultations with major banks, asset managers and the Treasury’s Borrowing Advisory Committee, many market players indicated they favored names like Rick Rieder or current Fed member Christopher Waller, whose independent stance is seen as stronger.
Economist Claudia Sahm said Hassett’s leadership performance depended on “which Kevin Hassett emerges,” while fund manager John Stopford offered a harsher assessment, saying the market already viewed him as “Trump’s puppet,” which risks permanent damage to the Fed’s institutional reputation.
Meanwhile, US Treasury Secretary Scott Bessent announced at the New York Times DealBook Summit that he wants to require 12 regional Fed presidents to have lived in their respective regions for at least three years in order to be appointed to their positions.
Bessent argued that candidates who do not meet this requirement should be vetoed by the Fed Board of Governors, saying, “The president and the board have the final say on the names that regional banks can choose. So if someone hasn’t lived in that region for three years, we will veto them.”
Bessent, who is in the process of determining Trump’s expected nominee as the new FED president for 2026, stated that the selection of many of the current regional FED presidents from outside their regions contradicts the founding purpose of the FED System.
*This is not investment advice.