President Donald Trump is pressuring the Fed to cut rates to 1%

Economists across the United States are clear on who they want running the Fed after Jay Powell steps down, but politics in Washington tells a different story.

Academic researchers overwhelmingly prefer Chris Waller, yet many believe that Kevin Hassett has the better odds of actually taking the job in 2026, according to a Financial Times poll conducted by the Clark Center for Global Markets at the University of Chicago’s Booth School of Business.

Out of 44 respondents, 82% said Waller should lead the central bank, but only 20% thought he would end up in the role. Meanwhile, 39% picked Hassett as the likeliest successor.

The split between preference and prediction comes down to President Donald Trump. His second term has been defined by heavy pressure on the central bank, and he has repeatedly demanded interest rates be cut to 1%.

He argues this would lift growth and ease the government’s borrowing costs. Trump has not shied away from personal attacks either, branding Powell a “moron” and a “numbskull” for refusing to slash rates at the pace he wants.

Trump pushes Fed to cut deeper

The Fed cut rates this month for the first time since December, lowering the benchmark federal funds range to 4–4.25% with a quarter-point cut. That was not enough for Trump’s latest board nominee, Steve Miran, who dissented and pushed for a 50 basis point cut.

Miran also called for five more quarter-point cuts before the year ends, more than double what any other senior Fed policymaker supports.

Waller, though seen as more cautious than Miran, had been one of two dissenters during the July meeting when he voted for a smaller quarter-point cut. This time, he refused to join Miran’s demand for the bigger half-point move. 

Johns Hopkins University economist Robert Barbera argued that Waller’s independence hurts his chances of rising to the top, saying, “Waller looks like a central banker, rather than someone who is prostrating himself for the job of Fed chair. And that’s precisely why he won’t get it.”

Not one of the economists surveyed supported Miran as their preferred pick for chair. Yet 20% still named him a possible Trump choice. Betting markets show Waller holding a narrow lead over Hassett, but Hassett is seen as having the political advantage.

Trump himself has said his preferred candidates are Waller, Hassett, and former Fed governor Kevin Warsh, stressing that loyalty and a readiness to slash rates are what matter most to him.

Interviews raise pressure as economy weakens

The tension grew when Trump attempted to fire Lisa Cook, a current Fed governor, accusing her of mortgage fraud. Cook denied the allegations and is challenging the move in court, a case that could set limits on presidential power over monetary policy.

At the same time, Treasury Secretary Scott Bessent is overseeing the early interview round for the next chair. Marc Sumerlin, one of 11 names on the longlist, met with him on Friday. The first round is expected to end within two weeks.

Scott himself had once been floated as a top contender, but Trump later signaled he wanted him to stay at Treasury. Even so, Cryptopolitan reported that Scott has made it known he wants whoever becomes chair to reform the Fed’s governance and shrink its balance sheet, which ballooned from years of quantitative easing. The Chicago-Booth poll narrowed the field to five: Waller, Hassett, Bessent, Warsh, and Miran.

Whoever takes over will face an economy hit from tariffs, a cooling labor market, and the risk of stagflation. Most Fed officials expect Trump’s tariffs to create one-off spikes in prices for a few goods, and they are willing to accept slower hiring rather than risk runaway inflation.

But many of the economists in the poll now believe stagflation is becoming more likely. Nikolai Roussanov of the Wharton School said, “The dual mandate puts the Fed in a bind, but if recent history is any guide — the last couple of decades, at least — the FOMC tends to prioritise employment over inflation.”

If you're reading this, you’re already ahead. Stay there with our newsletter.