Haslett Likely to Become “Shadow Fed Chair”

If Kevin Haslett, Director of the White House National Economic Council, is nominated by Trump as Fed Chair, he may serve as the de facto “shadow Fed chair” for the next five months, with markets closely monitoring his every word.

Since Trump indicated he might not reappoint Powell, investors have speculated on the next Fed Chair. Recently, the Treasury hinted the nomination could be announced before Christmas, and betting markets show Haslett’s probability over 50%, well above Waller’s ~22%.

Potential Political Risks

• If Powell resigns, Trump-appointed governors would hold a 5-2 majority on the Fed Board.
• Market focus may shift from rates themselves to how much the Fed would support Trump’s desire for rate cuts despite inflation above the 2% target.
• Haslett is seen as politically aligned with Trump and more hawkish than Waller; his statements over the next five months will influence interest rate expectations, USD flows, and fixed income markets.

Haslett’s Views

• Supports further rate cuts
• Warns of partisan divides within the Fed
• Downplays tariff-driven price pressures
• Discusses 50-year mortgage programs

Overall, Haslett is a conservative economist with bold Fed reform ideas. If confirmed, his public statements could trigger market volatility, especially if they diverge from Powell’s positions.