Former Fed Governor Kevin Warsh's stock is now rising again following the Trump DOJ's probe into Fed chair Powell
Kevin Hassett, director of the National Economic Council, during an Economic Club of Washington event in Washington, DC, US, on Wednesday, Nov. 12, 2025. (Al Drago/Bloomberg via Getty Images).
National Economic Council Director Kevin Hassett was long viewed as the frontrunner to replace Federal Reserve chair Jerome Powell once his term ended in May. Then the Trump administration opened a criminal investigation into Powell that triggered immense backlash in Congress, including from scores of Republicans.
Now Hassett, a well-regarded economist among GOP senators, is losing his frontrunner status in a Fed race still populated with an investment executive and two central bank officials, including another named Kevin.
President Donald Trump said Friday he's inclined to keep Hassett in his current job as one of his top economic lieutenants. Hassett is a consistent defender of Trump's policies, and he's similarly criticized the Fed for not cutting interest rates faster.
"I actually want to keep you where you are, if you want to know the truth. Kevin Hassett is so good," Trump said at a White House event on Friday morning. He further described losing Hassett to the central bank as a "serious concern," since he'd be expected to operate independently of the executive branch.
The Department of Justice probe into Powell sent shockwaves through Congress, Wall Street and beyond. It prompted a group of central bankers from the U.K., Canada, and Europe to defend Powell, saying they stood in "full solidarity" with the embattled Federal Reserve. The last three remaining Fed chairs backed up Powell too.
The four finalists for Fed chair include Kevin Warsh, a former Fed governor; Christopher Waller, a current Fed governor; and Rick Rieder, a Blackrock executive. Warsh's stock is rising again since the probe raised questions among analysts and Fed observers over whether Hassett will distance himself from the White House.
"Crushing Hassett only helps Warsh. We know that Kevin Warsh has been hawkish his entire career," Neal Dutta, the head of economics at Renaissance Macro Research, said in a social media post. "He hates inflation even when it is running below the Fed’s target. It would be an interesting choice given the President’s policy views."
Trump relentlessly pummeled Powell through much of 2025 for not endorsing drastically lower interest rates, which he argued accelerates economic growth. Shortly after the investigation became public, Powell released a rare video calling the probe politically motivated.
Trump was expected to name a replacement for Powell sometime by the end of the month, though the timeline might get scrambled given the probe and a key GOP senator's blockade. Sen. Thom Tillis of North Carolina vowed to oppose consideration of any nominee to the Fed in the Senate Banking panel until the investigation is concluded. "I just think we've got to settle this matter before I can seriously consider anybody on the Fed board," Tillis told reporters.
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