Market Warns U.S. Treasury: Nominating Hassett as Fed Chair Could Trigger a Rate Cut Storm

[Market Warns US Treasury: Nominating Hassett as Fed Chair Could Trigger Rate Cut Storm]
Bond investors have informed the US Treasury of their concerns that Kevin Hassett, a potential nominee for Federal Reserve Chair, might pursue aggressive rate cuts to appease Trump.

According to several sources, Treasury officials have solicited feedback on Hassett and other candidates during one-on-one discussions with executives from major Wall Street banks, asset management giants, and other key US bond market participants.

These sources said the discussions took place in November, before Treasury Secretary Bessent launched a second round of interviews to find a successor to Powell. The Treasury stated that it “regularly communicates with a wide range of market participants and investors about important developments and dynamics in the US Treasury market and the broader financial markets.” It added: “In discussions with key stakeholders, the range of market expectations regarding asset outcomes associated with the five potential Fed chair candidates is extremely narrow.”

As the chief economic advisor to the White House, Hassett has emerged in recent weeks as a leading candidate for the role, after Trump and Bessent narrowed the initial list of 11 potential nominees.

Trump said on Tuesday that he plans to announce his pick for Fed Chair “early next year” and hinted that Hassett is a “potential” contender. After he mentioned Hassett, the US dollar briefly dipped.