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SCOOP: There is a last ditch by Wall Street and corporate America insiders to caution @realDonaldTrump about the selection of Kevin Hassett as Fed chair. Their argument goes something like this: Given the political nature of his job (NEC chief) and past work, Hassett has lack of credibility inside the Fed with staff and in the markets, which seeks a degree of Fed independence. They’re saying that his appointment sets the stage for higher long term interest rates because 1) The Fed will be a disorganized mess with leader lacking credibility inside 2) If Hassett manages to cut short term rates ( as Trump wants) with divided vote because of sticky inflationary pressures, it will be perceived as political and inflationary. Btw mortgage and consumer rates are priced off the 10 year and if that spikes over inflation fears, it could cause an economic slowdown as the midterms approach. Of course Trump will PROBABLY ignore all of the above but that’s the latest in the Fed race. Other candidates are Kevin Warsh and Fed gov Christopher Waller, both of whom could be fall back choices. Story developing
CGasparino ↗