Kevin Hassett's transformation from a conservative economist to a staunch defender of the president's economic agenda has raised questions about how he would lead the core institution if he were to take the helm of the Federal Reserve.
Dressed in a blue suit, Kevin Hassett stood before a large window, his hand resting on a yellow sofa.
Kevin Hassett, the current Director of the White House National Economic Council, once advocated for free trade as the path to national prosperity and argued that increased immigration benefits the economy.
For years, economist Kevin Hassett, who served as an economic advisor to three presidential candidates—John McCain, George W. Bush, and Mitt Romney—consistently adhered to traditional conservative economic principles. As a senior fellow at the right-leaning American Enterprise Institute, he long promoted free trade as essential for national prosperity and maintained that increasing immigration was beneficial for economic development.
However, since assuming the role of Director of the National Economic Council for President Trump, Hassett's policy positions have become almost unrecognizable to those who have known him for decades. He now supports imposing tariffs and claims they have minimal impact on consumer prices; he has also described the removal of immigrants as a "healthy development" for a labor market long dependent on them.
"When foreign-born workers leave, it creates job opportunities for native-born individuals," Hassett stated this month on CBS's Face the Nation, adding that many of those leaving the workforce were undocumented immigrants. "Previously, there was an influx of undocumented immigrants taking jobs from native-born Americans at lower wages, but now we are seeing native-born workers re-entering the labor market at higher wages."
Hassett's ability to adapt his policy stance as needed has facilitated his rise within the president's inner circle of advisors and positioned him as the leading candidate for Trump's nomination for the next Federal Reserve Chair. As a frontrunner on Trump's list to replace Jerome H. Powell, investors and policymakers are striving to discern Hassett's true beliefs and whether, if appointed, he could withstand political pressure from the White House demanding interest rate cuts at any cost.
The president is expected to announce his choice for Fed Chair in early 2026. Trump stated in late November that he had narrowed a list of 11 candidates down to just one, a timeline slightly later than many had anticipated.
This individual is widely believed to be Hassett. Since then, he has proactively addressed concerns, asserting that his loyalty to the president would not impede his ability to serve as an independent Fed Chair. To this end, Hassett recently told CBS News that Trump has "no influence" over interest rate decisions. However, the president has made it clear that he will only select someone who supports significantly lowering borrowing costs for the position.
Last Tuesday, the president was more explicit about his criteria on social media: "Anyone who disagrees with me will never, ever be the Chairman of the Federal Reserve!"
In recent weeks, the president has also met with former Fed Governor Kevin M. Warsh and Christopher J. Waller, a Fed Governor he appointed in 2020. Warsh was previously considered for the role during Trump's first term, and the president has spoken highly of both men, indicating that Hassett's appointment is not a foregone conclusion. A White House spokesperson, Kush Desai, stated that discussing potential nominations at this stage is "pure speculation."
The fact that the 63-year-old Hassett has remained a long-term fixture in Trump's advisory circle is itself surprising, puzzling traditional Republicans and drawing skepticism from the populist right.
Hassett, who holds a Ph.D. in economics, has made erroneous predictions—such as claiming U.S. COVID-19 deaths could drop to zero by May 2020. In 2018, he found himself in an awkward position when he disputed the conclusions of an internal White House analysis showing that Trump's tariff policies would harm U.S. economic growth.
"If you build a model assuming that other countries will lower their trade barriers to align with us in the future, it would be a tremendous boon for both the global economy and the U.S. economy," Hassett said at the time.
For those familiar with Hassett, this kind of "shift in stance" is standard practice for a senior White House advisor.
"Kevin has passed a series of tests, including loyalty," said Alan Auerbach, a professor at the University of California, Berkeley, who was Hassett's graduate thesis advisor. "Economists in such environments choose their words carefully, but Kevin is aware of the mainstream academic research on tariffs."
Some prominent economists have been less forgiving of Hassett's "flexibility" on economic issues.
In March, Hassett stated on ABC's This Week that producing goods domestically enhances the welfare of Americans, calling it "Economics 101." Subsequently, Greg Mankiw, former Chairman of the Council of Economic Advisers under George W. Bush, rebutted this view on his popular blog.
"Trade restrictions do not increase Gross Domestic Product (GDP). In fact, they interfere with international markets and the functioning of comparative advantage, reduce production efficiency, and consequently lead to a decline in GDP," Mankiw wrote. "Come on, Kevin, stop using Economics 101 to justify Trump's trade policies."
Hassett has proven himself a loyal aide to Trump. Yet, those who know him well wonder whether he genuinely believes in the policies he now publicly champions.
The central question surrounding Hassett now is: if appointed Fed Chair, how would his true economic philosophy manifest itself?
Hassett has been cautious in his remarks regarding how he would perform the duties of Fed Chair. When asked about Fed independence in September, he suggested that political motivations might already be influencing the work of the Federal Reserve Board.
"You can claim you will remain independent and impartial, but ultimately, it's about actions," Hassett said on CNBC. "You have to observe what the Fed does and judge for yourself whether they are acting purely based on economic data or for some political purpose."
It remains unclear how Hassett himself would avoid being influenced by political factors. Although he stated that Trump would not influence Fed policy decisions, he also said the president's views on interest rates are "firmly held and well-argued," and joked that if he were Chairman, he would be happy to talk with Trump daily "because chatting with him is so much fun."
He has also joined the president in some of the sharpest criticisms of the Fed, such as suggesting Trump would be justified in firing Powell over mishandling the costly renovation of the Fed's Washington headquarters.
"If you just looked at his resume, without the name, and asked, 'Is this person qualified to be Fed Chair?' you would say yes," said Stephen Stanley, chief U.S. economist at Santander Bank. "But the concern in financial markets is about his independence."
Thomas Philipson, who worked with Hassett on the Council of Economic Advisers during Trump's first term and has known him for decades, believes Hassett would not want the Fed to become a "subsidiary" of the White House.
"He has great respect for the Federal Reserve as an institution," Philipson said. "He believes the Fed should not be entirely controlled by the White House."
One observer predicted that if Hassett were to become Fed Chair, his principles would withstand Trump's mercurial ideas.
"I understand that seeing him support the Trump administration's actions might lead someone to ask, 'If Kevin gets the job, will Trump really be in charge?'" the observer said. "But my judgment is no, Trump would not actually be running the Fed."
