White House economic advisor Kevin Hassett is President Donald Trump’s leading nominee for Federal Reserve chairman, but some within the government have questioned his suitability for the position.

Policy influence questioned: accused of prioritizing propaganda over implementation.

According to three people familiar with the inner workings of the government, Hassett's critics believe that, as director of the National Economic Council, he has done little to advance policy beyond serving as a public advocate for the president's agenda. These individuals, who were allowed to speak anonymously about private conversations, expressed concerns about his suitability to head the Federal Reserve at a time when it plays such a crucial role.

One person said, "If you analyze the National Economic Council closely, what exactly have they done?" suggesting that Hassett's influence on trade, deregulation, and other key areas was limited. He added, "He frequently appears in the media to defend the president, which is valuable to the president, but the Fed chairman's excellent communication skills may not be the skill that those seeking real change at the Fed value."

The second person cited the rollout of Trump's new trade regime on April 2, which included imposing massive new tariffs on dozens of countries and roiling global markets. When asked about Hassett's contribution to the event, the person said, "Just an audience member." His critics and allies alike have described his contributions to programs ranging from deregulation in areas like finance to the environment as more about offering advice on the potential impact of policies than coordinating outcomes—a role typically held by the director of the National Economic Council.

Nominations at a critical juncture: economic fragility and pressure to cut interest rates

For months, Trump has been deliberating on who will succeed Federal Reserve Chairman Jerome Powell, whose term ends next May—a move that will be the president's most important economic appointment. He has spent a year attacking Powell for not cutting interest rates quickly enough, raising concerns about the extent to which he intends to exert political influence over the independent Fed under new leadership.

Hassett leads the National Economic Council during a period of economic fragility, with strong economic growth but inflation higher than the Federal Reserve's desired level and a weakening job market. The U.S. Labor Department reported Tuesday (December 16) that the unemployment rate jumped to 4.6% in November, the highest level in four years. Following the report's release, Hassett stated that the Trump administration is pushing for private sector job growth, but "the Federal Reserve has ample room to cut interest rates."

The role of the Federal Reserve Chair: Leadership beyond economics

Some of the president's advisors praised Hassett's extensive research experience, but also pointed out that the capabilities required for the position of Federal Reserve Chair go far beyond economic expertise. Like the director of the National Economic Council, who is responsible for coordinating government economic policy, the Federal Reserve Chair's job is to build policy consensus amidst differing opinions, which demands strong leadership.

Directors of the National Economic Council have typically wielded significant influence in formulating government strategies across various sectors, from healthcare and energy to trade, serving as central hubs for interagency coordination. Compared to other senior economic officials in the Trump administration—such as Treasury Secretary Scott Bessett, Commerce Secretary Howard Lutnick, U.S. Trade Representative Jameson Greer, and White House advisor Peter Navarro—Hassett's leadership role in policy initiatives appears less prominent.

Supporters' defense: Scholarly qualities and internal coordination ability

Hassett declined to comment. Government officials dismissed claims that he failed to fulfill his duties as director of the National Economic Council. A White House official, speaking on condition of anonymity, stated that this was "not the traditional way the White House operates," and that the president himself often makes decisions personally on the details of trade matters.

Brad Gerstner, CEO of Altimeter Capital, who played a key role in creating the "Trump Account" as an investment vehicle for children, pointed out that Hassett provided crucial support for the policy argument through his research. Gerstner praised Hassett's contributions as "meticulous and sophisticated," not merely for personal gain.

Gerstner stated, "To my knowledge, in the economic sphere, both the president and cabinet colleagues frequently consult Kevin as chief advisor," adding that Hassette regularly attends Oval Office announcements that influence the economy. "But he is not the aggressive, radical type who needs to be constantly by the president's side."

Several cabinet ministers issued statements affirming Hassett's influence. Housing and Urban Development Secretary Scott Turner stated that the National Economic Council director played an "extremely important shaping role" in the Republican tax bill passed this summer. Hassett, an expert in corporate tax policy, had previously negotiated with Bessant in Congress.

Agriculture Secretary Brooke Rawlings praised his “policy acumen and cross-cabinet coordination, which have effectively advanced the Department of Agriculture’s core priorities, such as stabilizing egg prices, addressing national security threats affecting beef cattle herds, and implementing farmer-first economic policies.”

Transportation Secretary Sean Duffy stated that Hassett is "a key partner in our latest initiative aimed at resetting fuel economy standards and repealing Biden-era electric vehicle promotion policies, making cars affordable for people again."

Leadership Style Controversy: Can He Handle the Federal Reserve?

But Hassett's critics see his leadership style as crucial—they argue that it would be better for the country to have someone at the helm of the Federal Reserve who can lead a large network of employees and coordinate the policy-making committee to create a new interest rate setting mechanism.

While interest rate cuts have become a common advocacy among senior Trump administration officials (including Hassett himself), it remains unclear whether the president's expectations for Federal Reserve reform are limited to this. A second source familiar with the administration's internal dynamics suggests that former Fed Governor Kevin Warsh may be better suited to push for reform, while current Fed Governor Christopher Waller, another candidate on the shortlist, might be more likely to persuade other Fed officials to support rate cuts.

Reform Vision: Driving Transparency from an Insider Perspective

In a public event last month, Hassett emphasized that his early experience as a field economist at the Federal Reserve was "the reason I was able to do the job immediately." He stated that he understands "the strengths and weaknesses of the Fed's mindset, including many drawbacks," and listed the deficiencies in the Fed's economic forecasting system as an area urgently needing reform.

Thomas Philipson, who worked with Hassett on the Council of Economic Advisers during Trump's first term and has known him for decades, points out that Hassett will strongly push for greater transparency at the Federal Reserve—a quality he believes the Fed currently lacks. Philipson states, "He possesses a dual skill set: deep roots in economics research and exceptional public communication skills, which is unique among other candidates. Whoever becomes Fed chairman is unlikely to be appointed by Trump again, so the notion that they will be overly compliant is an exaggeration."

Ideological Challenges: Reconciling Free Market Context with Tariff Policy

A second source familiar with the matter revealed that while Hassett has consistently remained a staunch supporter of Trump's agenda, some close to the president question whether the economics PhD truly endorses the massive tariff policies that define his second term—which could influence his assessment of the economic effects of tariffs as Federal Reserve Chairman. Referring to Hassett's long-standing ties to the traditionally conservative free-market think tank, the source stated, "He's essentially a member of the American Enterprise Institute." Philipson believes that Trump's strategy of using tariffs as a bargaining chip in trade negotiations may have brought Hassett's views closer to the president's.

An anonymous senior government official said: "Hassett has quietly provided important intellectual support for advancing the president's economic agenda, and his academic research on making economics great again has laid a solid foundation for the implementation of the president's historic tax cuts for working families and tariff agenda."

Ultimately, the impact on the dollar will depend on whether Hassett can demonstrate through action, amidst the skepticism, that he can effectively implement policies that meet economic needs while upholding the Federal Reserve's institutional bottom line of protecting it from undue political interference. Currently, the uncertainty surrounding him is itself a short-term risk factor for the dollar. In early Asian trading on Wednesday, the dollar index fluctuated narrowly around 98.20, having touched a low of 97.87, its lowest level since October 3rd, in the previous trading session.



(US Dollar Index Daily Chart, Source: FX678)

At 09:01 Beijing time, the US dollar index is currently at 98.19.