President Donald Trump has revealed he is considering two top candidates, both named Kevin, to lead the Federal Reserve, but a controversial Department of Justice probe could derail the entire selection process.
The Two Kevins: A Television-Friendly Face-Off
During a White House event on Friday, President Trump publicly praised Kevin Hassett, his National Economic Council director, for a recent television appearance. Trump told Hassett he was "fantastic on television today" after the economist defended the administration's record on Fox Business Network.
However, Trump hinted that Hassett's skill as a communicator might be a reason to keep him in his current role rather than appoint him to the more reserved Federal Reserve. "I actually want to keep you where you are if you want to know the truth," Trump stated, adding that Fed officials "don't talk much."
The other leading candidate is Kevin Warsh, a former Federal Reserve Board governor appointed by President George W. Bush in 2006. According to the Wall Street Journal, Trump was impressed by Warsh's "acumen and good looks" during an interview last month. Sources suggest the frontrunner status between Hassett and Warsh changes daily.
A Shadow Over the Nomination: The DOJ Investigation
The selection process has been complicated by a startling announcement from the current chair, Jerome Powell, whose term expires in May. On Sunday, Powell revealed the Department of Justice is investigating him, suggesting it may be political retaliation for the Fed's reluctance to cut interest rates more aggressively.
Powell warned that the central bank's independence is under threat. "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation," he said.
President Trump has denied ordering the probe, but the investigation is causing significant concern in the Senate. Republican Senators Thom Tillis and Lisa Murkowski, both occasional critics of the President, have said they will withhold their votes on any nominee until the DOJ matter is resolved.
Senate Scrutiny and Alternative Candidates
Senator Tillis expressed deep reservations about confirming any nominee under the current cloud. "I wouldn't consider my mother for this post under the current conditions," he told the Wall Street Journal. He also questioned whether candidates perceived as too close to Trump, like Hassett, could truly be independent.
This scrutiny may give Kevin Warsh, with his established Fed background, an edge over Hassett, who has publicly defended the DOJ investigation. Tillis also suggested the President look beyond the two Kevins, proposing Fed Governor Christopher Waller as a candidate who "would certainly address a lot of the concerns." Another name in the mix is BlackRock's Rick Rieder.
The political drama sets the stage for a contentious confirmation battle, with the future leadership of the world's most influential central bank hanging in the balance.
