Bond Investors Warn US Treasury Over Potential Fed Chair Pick

Some major bond investors have privately warned the US Treasury Department about the possible nomination of Kevin Hassett as Federal Reserve Chair, according to sources familiar with the matter. Their concern centers on Hassett's perceived susceptibility to political pressure from former President Donald Trump on interest rate decisions. These investors fear that Hassett, a former Trump advisor, may not maintain the Fed's historical independence. Specifically, they worry he could lower interest rates to aid Trump's re-election campaign, regardless of economic data. The Federal Reserve sets monetary policy, including key interest rates, to manage inflation and employment. Its operational independence from political influence is a long-standing principle meant to ensure stable economic management. The Treasury Department received these warnings as the White House considers candidates for the powerful Fed chair position. The current chair, Jerome Powell, is serving a term that ends in 2026.