Trump cancels Fed chair interviews, signaling imminent pick as markets weigh dovish risk
Traders braced for a directional move in the dollar and Treasuries after reports that Donald Trump canceled interviews with Federal Reserve chair candidates, suggesting an announcement could be imminent and reviving speculation around a more dovish policy tilt.
Decision clock speeds up after interviews scrapped
The Wall Street Journal, citing reporting by Nick Timiraos, said interviews slated for Wednesday were canceled as Trump narrowed in on his choice. It wasn’t immediately clear if the meetings would be rescheduled. People familiar with the process said Kevin Hassett — a former White House Council of Economic Advisers chair — had been floated publicly by Trump earlier this week. However, there is no definitive indication he is the final pick, and Hassett’s interview was among those canceled.
“The truth is nobody knows who President Trump’s next pick for the Fed Chair will be until he makes the announcement himself. Everything until then is pure speculation,” the White House said in a statement.
Trump, who often favors dramatic rollouts, told reporters he had reduced the shortlist to one, and teased from the stage that a “potential Fed chair” was in the room.
Why markets care
Investors are highly sensitive to the policy leanings of the next Fed chair. A Hassett selection is broadly perceived by traders as dovish and more tolerant of inflation risk, a stance that could lower real rates and support risk assets but pressure the dollar and long-dated Treasuries. In that scenario, positioning typically favors curve steepening (2s10s), wider breakevens, and firmer gold.
By contrast, a chair seen as more hawkish or focused on price stability above all else would likely buoy the dollar, push front-end yields higher, and anchor long-end rates, favoring a flatter curve. With headline uncertainty high and timing unclear, FX and rates volatility risk premia tend to rise into the announcement window.
Key points
- WSJ: Trump canceled this week’s interviews with Fed chair contenders after homing in on a pick.
- Wednesday’s slate was called off; no clarity on rescheduling. Kevin Hassett was among those affected.
- White House: final decision is unknown until the President announces it; everything else is speculation.
- Market read: a Hassett-led Fed is seen as more dovish—typically negative for the US dollar and long-duration Treasuries, supportive for gold.
- Traders are watching DXY, USD/JPY, the 10-year yield, breakevens, and Fed funds/OIS pricing for early tells.
FX and cross-asset setup
– US dollar: Event risk skews downside if the pick is seen as inflation-tolerant or eager to cut. Watch DXY around key support and USD/JPY for rate-differential sensitivity.
– Rates: Long-end Treasuries could underperform if the market prices in looser policy, steepening the curve. Monitor 5s30s for confirmation and TIPS breakevens for inflation expectations.
– Gold: Lower real yields and a softer dollar would be supportive. Options skew and ETF flows may provide a cleaner read than spot around headlines.
– Equities: A dovish pivot may favor duration-sensitive growth shares, though bank stocks typically prefer a steeper curve if long-end yields climb.
What to watch next
– Announcement timing: The White House has not provided a schedule. Markets will be sensitive to any official media advisories or venue locks.
– Fed funds path: OIS and futures could reprice the timing and depth of cuts under a perceived dovish chair; observe terminal rate expectations.
– Confirmation dynamics: Senate posture and early policy remarks matter. A perceived dove who emphasizes inflation vigilance could moderate the initial market reaction.
– Liquidity and volatility: Expect wider bid-ask spreads and higher implied vol in USD rates and major FX pairs into the headline window.
FAQ
Who reported that the Fed chair interviews were canceled?
The Wall Street Journal reported the cancellations, noting that interviews planned for Wednesday were scrapped as President Trump zeroed in on his choice.
Does this mean Kevin Hassett will be the next Fed chair?
Not necessarily. Although Trump mentioned Hassett publicly and his name is widely discussed, the White House says no one knows the pick until the President announces it. Hassett’s scheduled interview was also canceled.
Why would a Hassett appointment be viewed as dovish?
Market participants associate Hassett with a pro-growth, inflation-tolerant stance. Traders infer that such a chair might lean toward easier policy, lowering real rates and supporting risk assets, which typically weighs on the US dollar and long-duration Treasuries while supporting gold.
How could FX markets react to a dovish Fed chair?
A dovish perception often weakens the dollar versus major peers, especially where rate differentials matter most (e.g., USD/JPY, EUR/USD). The magnitude depends on how much easing markets price into the Fed’s path.
What are the key market indicators to monitor?
Watch DXY, USD/JPY, the US 10-year yield, 2s10s and 5s30s curve slopes, TIPS breakevens, gold, and Fed funds/OIS pricing for rate expectations. These will show whether investors are leaning dovish or hawkish on the incoming chair.
When could the announcement come?
There is no official timing. Given the interview cancellations, traders expect a decision soon, but the White House has not issued guidance. Keep an eye on official advisories and press logistics.
How might stocks react?
A more dovish read could aid growth and tech given lower discount-rate assumptions, while a steeper curve might help financials. The initial move may be volatile and headline-driven.
This article was produced by BPayNews to inform FX, rates, and commodities participants about the evolving Fed leadership risk.
