President Donald Trump on Friday said he would like to keep his top economic adviser, Kevin Hassett, at the White House rather than potentially nominate him to replace Jerome Powell as chair of the Federal Reserve. Trump's comments, while not clearly definitive, have upended expectations around the extensive search the White House has undergone to find a new Fed chair, one of the most powerful financial positions in the world. The president's remarks have boosted the prospects for Kevin Warsh, a former Fed governor and already a top contender for the position.

President Donald Trump has narrowed down his list of potential candidates to lead the Federal Reserve to four people. On Tuesday, Trump ruled out Scott Bessent, saying the Treasury Secretary prefers to stay in his current role. Trump mentioned Kevin Warsh and Kevin Hassett as two of the candidates during an interview. Warsh, a former Fed governor, has been critical of current Fed policies. Hassett, director of the National Economic Council, has supported Trump's agenda. Trump did not reveal the other two candidates. The decision comes after Fed Governor Adriana Kugler announced her resignation last Friday.

The Federal Reserve will likely keep its key short-term interest rate unchanged on Wednesday, despite harsh criticism from President Donald Trump and his demand that the Fed reduce borrowing costs. After causing a sharp drop in financial markets two weeks ago by saying he could fire Fed Chair Jerome Powell, the Republican leader backed off and said he had no intention of doing so. Still, he and Treasury Secretary Scott Bessent have said the Fed should cut rates. The heightened scrutiny shows that even as the Trump administration backs off its threats to fire Powell, the Fed is still subject to unusually sharp political pressures, despite being an independent agency.