President Donald Trump has thrown a curveball into the race for the next Federal Reserve chair with his latest comments on a top contender.

On Friday, during a White House event, Trump expressed reluctance to nominate his National Economic Council Director, Kevin Hassett, for the role, despite Hassett being widely seen as the leading candidate to replace current Fed Chair Jerome Powell. Trump highlighted his concern about losing Hassett from his current position. A decision on Powell’s replacement, whose term ends in May, was expected soon, though Trump’s hesitation has introduced uncertainty into the timeline.

The issue has sparked debate over the future direction of the Federal Reserve and the balance of power in economic policymaking. While Trump has often criticized Powell for not cutting interest rates enough, the selection of a new chair raises questions about independence and alignment with White House priorities.

Trump’s Reluctance Shakes Up Fed Race

“I see Kevin’s in the audience, and I just want to thank you. You were fantastic on television today,” Trump said at the White House event, as Politico reports.

“I’m saying, wait a minute, if I move him, these Fed guys, certainly the one we have now, they don’t talk much. I would lose you. It’s a serious concern to me,” Trump added.

Losing a trusted adviser like Hassett, who’s been a vocal champion of the administration’s economic goals on TV, would sting. The White House needs voices that can cut through the noise of progressive economic theories.

Hassett’s Candidacy Faces New Challenges

Meanwhile, other contenders like former Fed board member Kevin Warsh, current board member Christopher Waller, and BlackRock executive Rick Rieder are circling the opportunity. Betting markets now see Warsh as the frontrunner.

GOP lawmakers are also uneasy about the Federal Reserve’s autonomy, especially amid a Justice Department investigation into Powell over his Senate statements last year on headquarters renovation costs. Sen. Thom Tillis of North Carolina won’t confirm any nominee until that probe wraps up. He’s also wary of Hassett’s tight White House ties.

Tillis has a point—too much coziness between the Fed and the executive branch could erode the central bank’s ability to act without political pressure. While alignment on issues like lower borrowing costs is crucial, a Fed chair must stand firm against overreach. It’s a delicate dance.

Investigation into Powell Adds Tension

Hassett, unlike other finalists, has publicly weighed in on the investigation into Powell. “I would expect that the markets would be happy to see that there’s more transparency at the Fed,” Hassett said.

Trump’s frustration with Powell isn’t new—he’s been vocal about wanting interest rates slashed, believing he should have a say in monetary policy. A new Fed chair, in his view, must share this push for cheaper borrowing. Hassett has echoed many of these critiques, which could be a double-edged sword.

Supporting the call for lower rates makes sense when inflation squeezes families and businesses.

What’s Next for Fed Leadership?

The uncertainty around Hassett’s nomination has left the door open for a broader debate on the Fed’s role. With Powell’s term still months away from ending, there’s time for other candidates to make their case. The question is whether Trump will prioritize loyalty or a fresh face.

At the end of the day, the Federal Reserve needs a leader who can balance economic growth with independence from partisan agendas.

While Hassett’s track record aligns with policies that prioritize American jobs and affordability, the concerns about his proximity to the White House can’t be ignored. Trump’s hesitation might just be the nudge needed to rethink what’s best for the nation’s financial future.