Why Kevin Hassett Appears to Be Trump’s Pick for the Next Fed Chair

Summary

WSJ What’s News: Why Kevin Hassett Appears to Be Trump’s Pick for the Next Fed Chair

Date: December 3, 2025
Host: Sabrina Siddiqui (for The Wall Street Journal)
Episode Focus: Examining President Trump’s likely pick for the next Federal Reserve Chair, trends in U.S. regulatory policy, and breaking national security developments.

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Main Theme

This episode zeros in on President Trump’s narrowing selection for the next Federal Reserve Chair, signaling a strong move toward Kevin Hassett. The discussion explores how Trump’s desire for loyalty and market credibility inform his choice, while also covering significant regulatory rollbacks in auto fuel standards and developments in U.S. defense policy, including the “Signalgate” messaging app controversy and new Pentagon drone initiatives.

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Key Discussion Points & Insights

1. Trump’s Fed Chair Selection Process

• White House Cancels Fed Chair Interviews:
  The administration unexpectedly calls off interviews with finalists for the Federal Reserve Chair position, suggesting the decision process has concluded ahead of schedule.

  • “The White House abruptly canceled interviews that were scheduled for this week, with a group of finalists being considered for the job.” (00:55)

• President Trump’s Public Hints:
  Trump publicly acknowledges Kevin Hassett as a frontrunner, calling him a “respected person” in a recent meeting.

  • Trump: “I guess a potential Fed chair is here, too. I don't know. Are we allowed to say that? Potential? He's a respected person, that I can tell you. Thank you, Kevin.” (00:14)

• Significance of Kevin Hassett:
  Nick Timoros, WSJ’s chief economics correspondent, explains why Hassett is the likely pick:

  • Trump’s desire for loyalty after his dissatisfaction with current chair Jerome Powell.
  • Hassett is a “conventional, credible, conservative economist” who is market-friendly and not seen as a partisan risk.
  • “He’s somebody the president trusts...and he’s been furious with [Powell’s] decision ever since because he thinks Powell hasn’t rewarded him with loyalty and he doesn’t want to make that mistake again.” (01:31-02:04)
  • “Hassett...checks a number of boxes that are going to be important to Trump… he’s not going to spook bond markets, that he’s some kind of unqualified partisan.” (02:04-02:23)

• What Kind of Fed Chair Will Hassett Be?
  Timoros notes a shift in Hassett’s rhetoric:

  • Previously asserted Fed independence, but this year has been more critical, claiming the Fed has become partisan.
  • Raising market questions: “What will Kevin Hassett actually be like if he’s in this job?” (02:51-03:36)

2. Rollback of Fuel Economy Standards

• Trump’s Regulatory Changes:
  Announces a rollback of car fuel economy standards from the Biden-era requirement of 50+ mpg down to 34.5 mpg by model year 2031.
  • Trump: “But we’re protecting our autoworkers and we’re making it easier for every family to afford high quality cars.” (04:20)
  • Auto and oil industries approve; environmental groups criticize the move for likely increasing gas demand and prices. (04:26)

3. Market Update

• Stock & Commodity Trends:

  • Dow closes up almost 1%.
  • Copper prices reach record highs due to global supply fears.
  • Natural gas futures hit a three-year high anticipating colder weather. (04:42-05:05)

• Corporate News:

  • Macy’s posts best comparable sales quarter in three years and upgrades its forecast.
  • Delta Airlines reveals $200 million lost from government shutdown, but bookings have rebounded. (05:05-05:50)

4. Pentagon “Signalgate” & Drone Program Expansion

• Signalgate Findings:
  Pentagon’s internal watchdog finds Defense Secretary Pete Hegseth used Signal app to share sensitive info about U.S. missions, violating department regulations.

  • The info “would have posed a risk to troops and the mission if it had been intercepted... [but] Hegseth has the authority to declassify information, suggesting no law was broken.” (06:29-07:29)
  • Defense Spokesman: ...a “total exoneration of Hegseth.” (07:29)
  • Unclassified version of the report to be released soon.

• U.S. Drone Program Adopts Iranian Model:
  Pentagon set to deploy a new low-cost “kamikaze drone,” modeled after Iran’s Shahed drones.

  • Defense Secretary Hegseth: “We now find ourselves in a new era, an era of cheap, disposable battlefield drones...” (08:08)

• Expert Analysis:
  Lara Seligman (WSJ national security reporter) explains why the U.S. is copying Iran’s design:

  • Iranian drones have been effective in Middle East conflicts, damaging U.S. interests and allies.

  • “...has actually been used to great effect by Iran... against commercial vessels in the Red Sea and by the Russians to great effect in Ukraine.” (08:36)

  • Cost vs. Effectiveness:

    • Each new U.S. drone costs around $35,000, compared to $16 million for existing MQ-9 Reaper drones.
    • “The idea is that they're one way attack drones, which means we can buy a lot of them, we can expend a lot of them, we can use them quickly.” (09:28)

  • Capabilities:

    • Fully autonomous, flexible launch options, and expected to be widely deployed by September 2026.
    • “The goal really is to have each army squad unit have one way attack drones by September 2026.” (09:56-10:36)

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Notable Quotes & Memorable Moments

• President Trump, on his shortlist:

  • “I guess a potential Fed chair is here, too... He’s a respected person, that I can tell you. Thank you, Kevin.” (00:14)

• Nick Timoros, on Trump’s desire for loyalty:

  • “He picked Jay Powell eight years ago, and he’s been furious with his decision ever since because he thinks Powell hasn’t rewarded him with loyalty and he doesn’t want to make that mistake again.” (02:08)

• Nick Timoros, on investor uncertainty:

  • “I think the question is going to be, which Kevin do we get?...This year, he’s taken...a more menacing tone towards the Fed... He’s attacked the Fed as being partisan.” (02:51)

• President Trump, on easing car regulations:

  • “But we're protecting our autoworkers and we’re making it easier for every family to afford high quality cars.” (04:20)

• Defense Secretary Pete Hegseth, on U.S. drone strategy:

  • “We now find ourselves in a new era, an era of cheap, disposable battlefield drones. We cannot be left behind. We must invest in inexpensive unmanned platforms that have proved so effective.” (08:08)

• Lara Seligman, on drone adoption:

  • “...has actually been used to great effect by Iran in the Middle East. Two years ago, Iran sent a shahed drone to attack Tower 22...and it killed three American soldiers and injured dozens more.” (08:36)

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Timestamps for Important Segments

• Trump hints at Kevin Hassett as Fed pick: 00:14
• White House cancels Fed interviews: 00:55
• Nick Timoros on reasons for Hassett's selection: 01:31-03:36
• Fuel economy standards rolled back: 03:43-04:26
• Market update & Macy’s/Delta news: 04:42-05:50
• Defense Secretary Hegseth Signal app controversy (“Signalgate”): 06:29-07:29
• Pentagon’s 'drone dominance' initiative: 08:08-10:36

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Conclusion

This news-packed episode offers clear insight into the political calculations shaping the next Federal Reserve appointment, regulatory moves affecting the U.S. auto industry, and how defense readiness is evolving through new, inexpensive drone technology. Listeners gain an informed picture of critical transitions in the economy, the shifting landscape of regulatory policy, and military modernization—all with direct quotes and analysis from leading voices in journalism and public policy.

Transcript

[Sabrina Siddiqui]

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[Host/Anchor]

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President Trump appears to be closing in on his pick to lead the Federal Reserve.

[President Donald Trump]

I guess a potential Fed chair is here, too. I don't know. Are we allowed to say that? Potential? He's a respected person, that I can tell you. Thank you, Kevin.

[Host/Anchor]

Plus, a Pentagon watchdog finds that Defense Secretary Pete Hegseth's use of the messaging app Signal violated department regulations. And President Trump is rolling back the rule that requires cars to get 50 miles a gallon. It's Wednesday, December 3rd. I'm Sabrina Siddiqui for the Wall Street Journal, filling in for Alex Osla. This is the PM edition of what's news, the top headlines and business stories that move the world today.

As the question of who the next Federal Reserve chair will be looms large. The White House abruptly canceled interviews that were scheduled for this week, with a group of finalists being considered for the job. The interviews are part of the formal process for choosing who succeeds Jerome Powell, whose term expires in mid May. But President Trump has publicly said that he has already narrowed the list of potential Fed chairs down to a single pick. Nick Timoros, the Wall Street Journal's chief economics correspondent, has the story. Nick, what, if anything, do the cancellation of these interviews signal about the process and President Trump's thinking?

[Nick Timoros]

Well, we don't know exactly why these interviews were canceled. It could be a scheduling conflict. But they were canceled on the same day that President Trump said. We were looking at a lot of candidates, but now it's down to one. And he was in a meeting yesterday that Kevin Hassett was at, and he said, oh, there's a potential Fed chair here. So he's sort of teasing this idea or allowing the public to run with it, that Kevin Hassett is going to be the next Fed chair. And Hassett makes sense in the standpoint that he checks a number of boxes that are going to be important to Trump. One is that he's somebody the president trusts. He picked Jay Powell eight years ago. He and he's been furious with his decision ever since because he thinks Powell hasn't rewarded him with loyalty and he doesn't want to make that mistake again. The second box that Hassett checks is that he's a conventional, credible, conservative economist. He's not going to spook bond markets, that he's some kind of unqualified partisan. So that's why the betting markets believe that Hassett is going to be this pick.

[Host/Anchor]

Hassett is currently the director of the National Economic Council and also served as an economic adviser during Trump's first administration. What else can you tell us about him and how Wall street sees him?

[Nick Timoros]

Well, I think the question is going to be, which Kevin do we get? Before he went to work for Donald Trump and even through the first term, he said all the normal kind of predictable institutional establishment things. The Fed should be independent. You shouldn't try to fire the Fed chair. We should just let the Fed do its job. This year, he's taken, you could say, a more menacing tone towards the Fed, the institutional arrangement that we refer to as independence. He's attacked the Fed as being partisan. He says we should have an independent Fed. But, you know, he suggested that it's the Fed that's changed and that they've become more partisan. And so I think the question investors have is what will Kevin Hassett actually be like if he's in this job?

[Host/Anchor]

That was the Wall Street Journal's Nick Timiros. Nick, thank you.

[Nick Timoros]

Thanks for having me.

[Host/Anchor]

President Trump says he plans to lower fuel economy standards for cars. In his latest push to relax regulations on the auto industry. The federal government will now require that cars average 34 and a half miles a gallon by model year 2031, down from the standard of just over 50 miles a gallon set by the Biden administration. As fuel economy standards have increased over the years, they pushed automakers to make more fuel efficient cars and encouraged the rise of electric vehicles. The Trump administration says today's changes will make cars more affordable. This is the president speaking from the Oval Office.

[President Donald Trump]

But we're protecting our autoworkers and we're making it easier for every family to afford high quality cars.

[Host/Anchor]

The auto and oil industries largely approve of the move, but environmental groups criticized it and argue that gas guzzling vehicles are likely to increase demand for gas and drive up its price.

The Dow led market gains today, closing up almost 1% in commodities trading. Copper prices hit a record high of more than $11,400ametric ton in London over worries about tight global supply. And natural gas futures hit a three year high on forecasts for a chilly December.

Macy's is lifting its forecast for the year after reporting its best quarter of comparable sales, a key sales measure in more than three years. The department store chain has been closing some weaker stores while opening new Bloomingdale's and Blue Mercury stores, which focus more on luxury as part of its turnaround efforts. And Delta Airlines says the government shutdown took $200 million out of its fourth quarter profit. Delta says bookings fell by 5 to 10% during the 10 days that the shutdown's flight restrictions were in effect last month. But reservations have bounced back and demand is looking strong. Coming up, what we learned from the Pentagon inspector general's review of Signalgate. That's after the break.

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A Pentagon watchdog has found that Defense Secretary Pete Hegseth violated department regulations after sharing sensitive information on Signal earlier this year, a situation known as Signalgate. That's according to Senator Mark Kelly, a Democrat of Arizona who saw the report after it was sent to Congress. Hegseth used the encrypted messaging app to share details of a US Bombing campaign in Yemen in chats that included top officials, a journalist and his wife. People familiar with the matter say. The watchdog's report found that the operational details Hegseth shared on Signal would have posed a risk to troops and the mission if it had been intercepted, according to a person familiar with the report. It says that Hegseth declined to sit for an interview with the inspector general. The defense secretary instead sent a written statement saying he intentionally declassified information that that wouldn't pose a threat to service members or the mission. The department's inspector general concluded that Hegseth has the authority to declassify information suggesting that no law was broken. The chief Pentagon spokesman said the report was a, quote, total exoneration of Hegseth. A person familiar with the matter says an unclassified version of the report will be released tomorrow. And in other news from the Pentagon, it's deploying to the Middle East a new kamikaze drone. It's a copy of Iran's shahed drones that Iran and its proxies have used against US Troops and commercial ships in the region and that Russia has used in Ukraine. The new drones are an early example of a Pentagon push known as drone dominance, to buy cheap drones made by American companies that can quickly be moved to the field.

[Defense Secretary Pete Hegseth]

We now find ourselves in a new era, an era of cheap, disposable battlefield drones. We cannot be left behind. We must invest in inexpensive unmanned platforms that have proved so effective.

[Host/Anchor]

That was Defense Secretary Pete Hegseth in a video the Defense Department posted this week. Lara Seligman, a national security reporter at the Wall Street Journal, joins us now to discuss Lara, what is the incentive to copy the Iranian drone design?

[Sabrina Siddiqui]

The Iranian shahed, even though it's a cheap rudimentary system, it has actually been used to great effect by Iran in the Middle East. Two years ago, Iran sent a shahed drone to attack Tower 22, which is an outpost in Jordan, and it killed three American soldiers and injured dozens more. It's also been used by the Houthis against commercial vessels in the Red Sea and by the Russians to great effect in Ukraine, both targeting Ukrainian infrastructure as well as Ukrainian troops on the battlefield. That's become a war in which both sides are using these cheap, attritable drones to cause major, major damage. Part of this initiative is to adapt to the changing face of warfare.

[Host/Anchor]

And is this basically a cost saving measure or is there more to it?

[Sabrina Siddiqui]

Well, it certainly is going to save money since these drones only cost $35,000 compared to $16 million for say a MQ9 Reaper, which is sort of the cream of the crop of the drones that the US currently use it. The idea is that they're one way attack drones, which means we can buy a lot of them, we can expend a lot of them, we can use them quickly.

[Host/Anchor]

What else do we know about this drone and its capabilities?

[Sabrina Siddiqui]

So the drone is built by spectraworks, which is an Arizona based company. It's going to be the US military's first one way attack drone unit based in the Middle East. It has a triangular wingspan measuring just over eight feet. It can be launched from different mechanisms including catapults, rocket assisted takeoff, mobile ground and vehicle systems. It's also fully autonomous, which means that it can operate with little or no human interaction. And the goal really is to have each army squad unit have one way attack drones by September 2026. So they're trying to move out really quickly on this.

[Host/Anchor]

That was the Wall Street Journal's Lara Seligman. Lara, thank you, thank you. And that's what's news for this Wednesday afternoon. Today's show was produced by Pierre Vienneme with supervising producer our bell. I'm Sabrina Siddiqui for the Wall Street Journal. We'll be back with the new show tomorrow morning. Thanks for listening.

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