Kevin Hassett, former top economic adviser to President Trump, stated that any future appointment of Trump as Federal Reserve chair would not translate into political influence over monetary policy, reinforcing central bank independence. The remarks come amid growing speculation over Fed leadership and have implications for U.S. Treasury yields, the dollar, and equities.
- Kevin Hassett stated Trump would have 'no weight' on Fed decisions if appointed chair, reinforcing independence.
- 10-year U.S. Treasury yield (US10Y) stood at 4.67% as of late December 2025.
- S&P 500 (SPX) rose 0.7% following the remarks, indicating market confidence.
- The U.S. dollar index (USD) remained elevated at 104.3, reflecting stable investor sentiment.
- Historical data shows 78% of institutional investors prioritize Fed independence.
- Political risk in central banking remains a key driver of Treasury and equity market volatility.
Kevin Hassett, who served as chairman of the Council of Economic Advisers under former President Donald Trump, addressed growing concerns about political interference in monetary policy, asserting that Trump would have 'no weight' on the Federal Reserve’s decision-making if appointed chair. His comments, made in a public interview on December 14, 2025, come as speculation intensifies over potential leadership changes at the Fed following the upcoming term of current Chair Jerome Powell. The statement is significant given market sensitivity to central bank independence, particularly in light of recent political rhetoric around interest rates and inflation. With the 10-year U.S. Treasury yield (US10Y) hovering at 4.67% and the U.S. dollar index (USD) at 104.3, any perceived erosion of Fed autonomy could trigger volatility. Hassett’s assertion aims to reassure financial markets that the Fed’s policy trajectory would remain insulated from executive influence. The S&P 500 (SPX) gained 0.7% the day after the remarks, reflecting investor relief. Analysts note that the Fed’s ability to act independently is a cornerstone of market stability. A 2024 survey by the Federal Reserve Bank of New York found that 78% of institutional investors view political neutrality as a top factor in assessing Fed credibility. The implications extend beyond domestic markets. A stable, non-partisan Fed supports global confidence in the dollar as a reserve currency and influences cross-border capital flows. Hassett’s statement, while not binding, adds weight to the argument that any future Trump-led administration would preserve institutional norms, at least in theory.