Trump Nearing Fed Chair Decision: Kevin Hassett's Chances Fade

Trump’s appointee will need to win approval from Congress, a process that has become more complicated after some lawmakers have said they will not ratify any appointment until the Department of Justice drops a criminal investigation into the current chairman, Jerome Powell. The department launched the investigation this month into Powell for remarks he made to a Senate committee about renovations made to the Fed’s buildings. • Inside Trump’s war on the Fed chairman Jerome Powell The legal assault against Powell has triggered a backlash from fellow central bank governors, US lawmakers and the economics profession. Powell was appointed by Trump during his first administration in 2018 and his term is due to expire in May. Powell can still choose to remain on the Fed’s executive board of governors. Bessent hit out at claims that European governments were getting ready to dump their holdings of US treasury bonds in retaliation against the White House’s tariff threats over Greenland. On Sunday George Saravelos, an analyst at Deutsche Bank, wrote to clients that Europe was America’s single largest creditor and owned $8 trillion of US bonds and equities. • Why does Donald Trump want Greenland? “In an environment where the geo-economic stability of the western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part,” Saravelos wrote. Bessent said there had been no communication from European governments that they would carry out a fire-sale of US bonds, calling it a “false narrative” that the “media has latched on to”. “It defies any logic. The US Treasury market is the best-performing G7 bond market. I am sure European governments will continue to hold it. The media is hysterical. This is a false narrative that has been spun out of control.” Emmanuel Macron, the French president, told Davos delegates that Europeans had large amounts of their savings in US bonds. He did not advocate divesting from US assets but said that the bloc needed to channel more of its savings into “innovation and equities in Europe. This is our top priority.”