While markets expect Kevin Hassett to be named the next Federal Reserve chair, he is pointedly not the choice of respondents to the CNBC Fed Survey.
The December survey shows 84% believe President Donald Trump will tap Hassett, director of the National Economic Council, to head the central bank. But only 11% think that’s what the president should do. Fed Governor Christopher Waller is the favored pick of 47% of respondents, followed by Kevin Warsh at 23%. But only 5% of respondents think Trump will pick either of the two.
Concern about Hassett looks to be centered on his commitment to the Fed’s dual mandates and independence. 76% of respondents think the next Fed chair will be more dovish than current Fed chief Jerome Powell — that is, quicker to cut rates if labor markets weaken and slower to raise them in the face of above-target inflation. A 51% majority believe the next Fed chair is likely to fulfill the president’s desires for lower rates, compared to 41% who believe he will act independently.
When it comes to this week’s meeting, respondents expect a hawkish cut, that is, a cut followed by a pause. But they also but also show deep divisions over whether the fed should cut at all.
