On Tuesday, Ken Griffin, CEO of Citadel, encouraged President Trump to create “distance” between the presidency and the Federal Reserve regarding the selection of the next chairman.
His advice comes amid worries that Trump’s choice to replace Jerome Powell as Fed chairman may be closely aligned with the White House. The candidates currently in the mix include economic adviser Kevin Hassett and former Fed board member Kevin Warsh.
During an event in Paris, Griffin stated, “The most important action the president and the next Fed chairman can take…is to put distance between the White House and the Fed,” especially when asked about Hassett potentially taking on the role.
Griffin refrained from backing any specific candidate, reasoning that naming a preferred candidate “doesn’t help add anything to the discussion or decision at hand.”
He added, “We expect the president to make decisions based on who will give global markets, public investors, and consumers in the United States the greatest sense of security that U.S. inflation will be managed.”
Hassett currently chairs the National Economic Council and has previously served in the Trump administration. Many view him as the leading candidate for the Fed chair position, according to recent reports.
However, many on Wall Street, including CEOs and managers, are advising against choosing Hassett. Concerns have been raised that he may prioritize Trump’s wishes over market trends.
Although prediction markets previously favored Hassett, his standing fluctuated recently, especially after Trump’s remarks last week that seemed to elevate Warsh’s candidacy for the position.
Trump remarked, “I think we have Kevin and Kevin. Both of them. I think both Kevins are great.”
Jamie Dimon, CEO of JPMorgan Chase, has also indicated his support for Warsh, who served on the Fed’s board from 2006 to 2011.
Interestingly, while Griffin has been a significant donor to the Republican Party, he didn’t back Trump in the 2020 election and has criticized his tariff proposals.
Despite this, Griffin was part of a prominent gathering at the White House last month with other influential figures. On Tuesday, he noted that Trump seemed receptive to advice from business leaders regarding affordability—an issue that’s increasingly resonating with voters ahead of next year’s midterms.
Griffin noted the political landscape, observing that Democrats are gaining ground while Republicans are grappling with the implications of their own policies, which he described as “pro-inflationary.”
Trump has consistently voiced his intention to lower interest rates should either Hassett or Warsh be appointed as Powell’s successor, expressing his dissatisfaction with Powell for not easing rates fast enough.
This year, the Fed has already reduced interest rates three times, bringing them to a three-year low between 3.5% and 3.75%. However, Trump is pushing for rates to drop to as low as 1%, even as inflation rates remain above the Fed’s 2% target, hitting 3% in September, according to the latest data.
In light of concerns about being too aligned with Trump, Hassett stressed to CNBC that the Fed’s “independence is really, really important.” He expressed confidence that personal relationships wouldn’t hinder his decision-making process as chairman.
On CBS’ “Face the Nation,” Hassett mentioned that Trump’s views “will have no weight” in his decisions, but acknowledged that the president holds “very strong, well-founded views about what we should do” that could influence the committee.
