Who is the better Fed chair, Hassett or Warsh? Previously, the market had fully anticipated that Hassett would be nominated as the next chair, but last week, during an exclusive interview with The Wall Street Journal, Trump indicated that Kevin Warsh is currently the top candidate for Fed chair, while also praising Hassett as excellent. As market expectations for the next Fed chair have shifted, although Hassett still has the highest probability, Warsh's chances have surged significantly, narrowing the gap with Hassett. 1. What are the differences between them? 1) Background-wise Warsh: Served as a Federal Reserve governor from 2001 to 2011, directly participated in Fed decision-making during the financial crisis, and has extensive experience within the central bank. He previously worked at Morgan Stanley and is familiar with Wall Street. Currently, he is a researcher at the Hoover Institution at Stanford University. Hassett: Trump's long-term economic advisor, currently serving as the Director of the National Economic Council (NEC). He served as the Chairman of the White House Council of Economic Advisers during Trump's first term, primarily focusing on fiscal policy (such as tax cuts and trade). He holds a Ph.D. in economics and briefly worked at the Fed in the 1990s but leans more toward a political-economic advisory role. Differences: Warsh is more of a "Fed insider," with experience closer to monetary policy operations; Hassett is more of a "loyal Trump ally," with experience leaning toward White House economic agendas. This makes Warsh more likely to gain recognition from Wall Street and traditional financial circles, while Hassett is seen as more aligned with Trump. 2) On interest rate policy Common ground: Both have recently expressed support for rate cuts. During Trump's meeting with Warsh, Warsh explicitly stated that interest rates should be lower; Hassett publicly stated that there is "ample room for further rate cuts," even suggesting more aggressive cuts (e.g., 50 basis points). Differences: Hassett tends to favor rapid and aggressive rate cuts to stimulate growth; Warsh places greater emphasis on long-term stability, potentially lowering rates indirectly through structural reforms (such as ending QE and balance sheet reduction) to avoid short-term excessive easing that could trigger inflation. 3) Inflation and monetary policy framework Warsh: Strongly criticizes the Fed's recent policy "mistakes," believing inflation is the result of the Fed's "selective errors" (such as excessive easing and reliance on outdated data). Advocates for the Fed to return to its core mission: focusing on price stability and avoiding involvement in fiscal or social issues (such as climate or equality). Supports rule-based policies (e.g., fixed inflation targets) and reducing subjective "data dependence." Hassett: Places greater emphasis on growth and employment, with relatively moderate views on inflation. Supports low interest rates to stimulate the economy but emphasizes the Fed's need for transparency. Historically, he has not criticized the Fed's framework as frequently as Warsh and is more inclined to coordinate with fiscal policy (e.g., tax cuts + low interest rates). Differences: Warsh is more "hawkish" on inflation control, viewing the current Fed as suffering from "mission creep"; Hassett is more "dovish" on prioritizing growth and may tolerate higher inflation in exchange for employment gains. 4) Attitude toward Fed independence Hassett: Recently publicly emphasized that the Fed must be "completely independent," stating that Trump's opinions carry "no weight" in the FOMC (Federal Open Market Committee). He indicated that he would listen to Trump's views but ultimately make data-driven decisions as a committee. This is seen as a response to external concerns (fears that he would become a "Trump puppet"). Warsh: Has long advocated for Fed independence to avoid political interference. Historically, his statements have warned that government influence over the central bank could lead to runaway inflation. He is more widely recognized by Wall Street as an "independent." 2. Why did Trump change his stance? Previously, Trump was very inclined toward Hassett, hinting many times in the first week of December that he would nominate Hassett. However, a significant reason for the change in attitude last week is, in my opinion, that some Wall Street executives expressed concerns about potential market turbulence if Hassett were appointed, and I believe this concern influenced Trump's decision. Additionally, Trump met with Warsh on the 10th, during which Warsh explicitly stated that "interest rates need to be lower," aligning with Trump's own desire for low rates. This also contributed to Trump's change in perspective. Trump's stance is consistent: the Fed needs to continue cutting rates while being able to listen to his opinions. However, he cannot ignore the voices from Wall Street. Of course, Trump likely also enjoys the suspense created by the competition between the two candidates. Due to his pro-Trump background, Hassett is more widely concerned about compromised independence (though he publicly denies this); Warsh, given his former Fed role and critical record, is seen as more of a "traditionalist" who can uphold independence. This is also why Warsh's probability rose when Trump mentioned both candidates—it could alleviate market concerns about independence. If Hassett is appointed: The Fed may lean toward more aggressive rate cuts (though not excessively so), aligning with Trump's economic agenda (e.g., tariffs + low rates), but independence concerns would be greater. If Warsh is appointed: Policies would be more balanced and rule-oriented, focusing on balance sheet reduction and inflation control, with potentially more moderate rate cuts. This would be more welcomed by Wall Street, and independence concerns would be smaller. Ultimately, it depends on how Trump makes his choice. This article is sponsored by the meme trading tool https://t.co/xPiYWGDb1u ｜Trade fast, with many features, monitor on-chain wallets using @useXXYYio