Chris Waller, not Kevin Hassett, should lead the Federal Reserve

Subscribe to enjoy similar stories. On November 30TH President Donald Trump said he had decided whom to nominate as the next chair of the Federal Reserve. He has since said he will reveal his choice early next year.

In betting markets, money has piled on Kevin Hassett, his trusted economic adviser. Mr Trump is desperate for the Fed to cut interest rates faster. He has tried to oust Lisa Cook, a Fed governor; the row over whether he can will be heard by the Supreme Court in January.

And he has already put one of his advisers, Stephen Miran, on the Fed board temporarily. Mr Miran has voted for bumper rate cuts. As chair, Mr Hassett would paddle in the same direction.

It is common for the Fed chair to have a party affiliation. If having worked in the White House were a bar, then neither Alan Greenspan nor Janet Yellen could have occupied the role. Mr Hassett also has some qualifications for the top job.

Before joining the first Trump administration in 2017, he was a respected, if partisan, economist who had been published in leading journals. No one can claim he would be ignorant of the dangers of setting interest rates to keep Mr Trump happy or debt cheap, rather than to control inflation. Dig deeper The question is how much Mr Hassett would care about those risks.

While working for Mr Trump, he has behaved like a hack unconcerned with reality. In 2017 his “very [conservative]" estimate was that Mr Trump’s corporate-tax cuts would boost annual household incomes by $4,000 on average—far above other estimates at the time and any effect picked up since. In May 2020 his “cubic" model of the covid-19 pandemic projected that deaths would soon cease entirely.