Last updated 1 month ago. Our resources are updated regularly but please keep in mind that links, programs, policies, and contact information do change.
Kevin Hassett has emerged as an intellectual “architect” of new economic thinking: one that seeks to dismantle the regulatory state, redefine the mandate of the Federal Reserve, and aggressively utilize executive power to reshape the flow of capital in the United States.
To the uninitiated, Hassett might appear as a familiar archetype. He is a bespectacled academic with a pedigree from the University of Pennsylvania and a résumé boasting tenures at the American Enterprise Institute and the Federal Reserve Board. Yet this conventional exterior belies a career defined by audacious, often contrarian, forecasting and a willingness to challenge the deepest orthodoxies of his profession.
He is the man who, in 1999, famously predicted the Dow Jones Industrial Average would hit 36,000 when it was trading near 10,000—a prophecy that brought him decades of ridicule before its eventual, if delayed, vindication. He is the official who, during the darkest days of the COVID-19 pandemic, presented a “cubic model” of the virus’s trajectory that predicted deaths would drop to zero within weeks, clashing violently with the epidemiological consensus.
Now, as 2025 draws to a close, Hassett is widely considered the presumptive nominee to succeed Jerome Powell as Chair of the Federal Reserve when the latter’s term expires in May 2026. This potential appointment represents more than a personnel shift. It signals a fundamental regime change for the world’s most powerful financial institution.
A Hassett-led Fed would likely discard the cautious, data-dependent “soft landing” strategy of the Powell era in favor of a supply-side, growth-maximalist approach that prioritizes deregulation and low interest rates over strict inflation targeting.
[daily_briefly]
Early Life and Education
Kevin Hassett’s journey to the commanding heights of global finance began far from the trading floors of Wall Street or the corridors of Washington. Born on March 20, 1962, in Greenfield, Massachusetts, Hassett grew up in a region known more for its colonial history and bucolic landscapes than for economic theory.
He attended Greenfield High School, a public institution where he excelled academically, eventually earning admission to Swarthmore College in Pennsylvania. Swarthmore is a small, intense liberal arts college known for its Quaker roots and its emphasis on intellectual rigor and social responsibility. He graduated with a Bachelor of Arts in economics.
The Philadelphia School
Following his undergraduate studies, Hassett matriculated at the University of Pennsylvania for his graduate work. At Penn, he earned his Ph.D. in 1990, a period when the field was grappling with the integration of rational expectations and the microfoundations of macroeconomics.
Crucially, his dissertation adviser was Alan J. Auerbach, a titan in the field of public finance. Auerbach is renowned for his work on taxation, corporate financial policy, and the effects of fiscal policy on investment. Under Auerbach’s mentorship, Hassett focused intently on the interaction between tax codes and corporate behavior.
The central question of his early research was: How do taxes affect the decision of a firm to buy a new machine, build a new factory, or hire a new worker?
This was not an abstract inquiry. The “user cost of capital,” a concept developed by Dale Jorgenson and refined by Auerbach and others, became the lens through which Hassett viewed the world. The theory posits that the cost of capital is determined by the price of equipment, the interest rate, the depreciation rate, and, crucially, the tax rate.
Hassett’s doctoral work provided empirical evidence that taxes mattered immensely. If the government could lower the user cost of capital through tax cuts or investment incentives, firms would invest more, productivity would rise, and wages would eventually follow. This belief in the high elasticity of investment with respect to taxation became the bedrock of his professional worldview.
Columbia Business School
Upon receiving his doctorate, Hassett secured a prestigious position as an assistant professor of economics at Columbia Business School, where he taught from 1989 to 1993. As a young faculty member, Hassett was immersed in the debates surrounding the efficiency of financial markets and the optimal design of corporate tax systems.
During these years, he published prolifically in peer-reviewed journals. His work was technical, dense, and respected within the academy. He collaborated with Auerbach on papers examining the “Tax Reform Act of 1986” and its impact on equipment investment, arguing that statutory changes had significant, measurable effects on the capital stock.
This period established Hassett’s bona fides as a serious scholar. He was not a political hack or a cable news pundit; he was a tenured-track academic contributing to the frontier of economic knowledge. This distinction is vital, as even his fiercest critics in later years, such as Paul Krugman, would acknowledge that Hassett “used to be an excellent economist” before his descent into what they viewed as partisan hackery.
The Federal Reserve Years
In 1992, Hassett left academia to join the Board of Governors of the Federal Reserve System as an economist in the Division of Research and Statistics. For any observer trying to predict how Hassett might run the Fed in 2026, this five-year period is the most critical chapter of his biography.
The Federal Reserve is often described as a bank, but in reality, it is a massive research university attached to a printing press. The Division of Research and Statistics is the intellectual engine of the Board. It is responsible for producing the “Greenbook” (now part of the Tealbook), the confidential forecast of the U.S. economy that is presented to the Federal Open Market Committee before every interest rate decision.
As a staff economist, Hassett was a cog in this machine. He was responsible for analyzing specific sectors of the economy—likely business investment, given his specialization—and feeding his data into the larger model. This experience gave him a granular understanding of the Fed’s plumbing.
The Greenspan Era
Hassett’s tenure at the Fed coincided with the early years of the Alan Greenspan chairmanship and the dawn of the “New Economy” boom of the 1990s. This was a time of intellectual ferment within the central bank. The traditional relationships between unemployment and inflation (the Phillips Curve) appeared to be breaking down. Unemployment was falling, yet inflation remained low.
Hassett witnessed firsthand how a central bank chairman could challenge the consensus of his own staff. Greenspan famously overruled the staff’s inflation warnings, keeping rates lower than the models suggested, and was vindicated by the non-inflationary boom that followed.
This lesson, that the “models” can be wrong and that structural changes in the supply side (like technology or deregulation) can alter the speed limit of the economy, resonated deeply with Hassett. It reinforced his supply-side biases and likely sowed the seeds for his future critiques of the Fed’s “black box” methodology.
His experience as a “Fed insider” distinguishes him from other potential Trump nominees. He is not an outsider throwing stones at the temple; he is a former acolyte who believes the priesthood has lost its way.
The American Enterprise Institute
In 1997, Hassett left the Federal Reserve to join the American Enterprise Institute as a resident scholar. AEI is one of Washington’s premier conservative think tanks, serving as a holding pen for future Republican administration officials and a laboratory for free-market policy ideas.
At AEI, Hassett transitioned from a technical economist to a public intellectual. He began writing op-eds, testifying before Congress, and advising political campaigns. His work focused on tax reform. He became a leading advocate for shifting the U.S. tax code toward a consumption-based system and for drastically lowering the corporate income tax, which he argued was the most harmful tax to economic growth.
He rose to become the Director of Economic Policy Studies, a powerful perch that allowed him to shape the GOP’s economic orthodoxy.
“Dow 36,000”
In 1999, at the height of the dot-com bubble, Hassett co-authored a book with journalist James K. Glassman titled Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market. The premise was audacious: the U.S. stock market was not in a bubble, but was actually radically undervalued.
Hassett and Glassman argued that the “equity risk premium,” the extra return investors demand for holding risky stocks over safe government bonds, was an artifact of a bygone era. They contended that long-term data showed stocks were no riskier than bonds over 20- or 30-year horizons. As investors realized this “truth,” they would bid up stock prices until the expected returns of stocks and bonds equalized.
This repricing, they calculated, would drive the Dow Jones Industrial Average (then trading around 10,000) to 36,000 almost immediately, or within three to five years.
The Crash
The timing could not have been more catastrophic. Published in October 1999, the book hit the bestseller lists just months before the market peaked in early 2000. The dot-com bubble burst, erasing trillions of dollars in wealth. The Dow did not hit 36,000 in 2002 or 2004; it collapsed, then recovered, then collapsed again in 2008.
The book became a punchline, cited in finance classes as the ultimate example of “top-ticking” the market. It was described as the “most spectacularly wrong investing book ever.” Hassett and Glassman even lost a famous bet to a critic, agreeing to pay $1,000 to a charity if the Dow was closer to 10,000 than 36,000 ten years later. In 2010, with the Dow languishing well below their target, they conceded the bet and donated the money to the Salvation Army.
However, Hassett never fully recanted the underlying theory. In interviews decades later, he argued that the terrorist attacks of September 11, 2001, and the financial crisis of 2008 were exogenous shocks that no model could predict, effectively delaying the convergence he had forecast. In November 2021, when the Dow finally crossed 36,000, Hassett claimed a measure of vindication.
This episode is crucial for understanding Hassett’s psychology. It demonstrates a structural optimism and a willingness to double down on a theoretical model even when empirical reality diverges sharply. It suggests a man who believes that markets are fundamentally rational and driven by long-term fundamentals, and who views short-term crashes as noise.
Political Campaigns
Despite the reputational hit from Dow 36,000, Hassett remained a central figure in Republican politics. He served as the chief economic adviser to John McCain’s 2000 presidential campaign, a senior adviser to George W. Bush’s 2004 re-election, and an adviser to McCain again in 2008 and Mitt Romney in 2012.
In these roles, Hassett perfected the art of translating complex economic concepts into saleable political platforms. He was the bridge between the academic rigors of the Ivy League and the stump speeches of the campaign trail. He helped design the Bush tax cuts and the Romney economic plan, consistently advocating for supply-side measures.
Trump’s First Term
When Donald Trump won the presidency in 2016, his relationship with the traditional Republican economic establishment was fraught. However, in selecting a Chairman for the Council of Economic Advisers, Trump turned to Hassett. The nomination was seen as a peace offering to the party’s mainstream.
Hassett was confirmed by the Senate in a bipartisan vote, a rarity in the Trump era. Even liberal economists praised the choice. Jason Furman and Austan Goolsbee, Obama’s CEA chairs, publicly supported Hassett, calling him a “serious thinker” who would bring rigor to the White House. A letter signed by 44 prominent economists, including former Fed Chair Ben Bernanke, endorsed him.
The 2017 Tax Cuts
Hassett’s primary mission as CEA Chair was to provide the intellectual ammunition for the 2017 tax reform. This was the moment his entire career had been building toward. Drawing on his 1990s research with Auerbach, Hassett argued that the U.S. corporate tax rate of 35% was an anchor on the economy, driving capital abroad and suppressing domestic wages.
He produced a series of CEA white papers arguing that cutting the rate to 21% would lead to a surge in capital investment. Most controversially, he predicted that the tax cuts would eventually raise average household income by $4,000 to $9,000 a year. This figure was widely ridiculed by left-leaning think tanks as mathematically impossible, but Hassett stood his ground.
The passage of the Tax Cuts and Jobs Act was a crowning achievement for Hassett. While the long-term wage effects remain a subject of fierce debate, the immediate result was a boost in corporate earnings and a temporary acceleration in GDP growth.
The COVID “Cubic Model”
Hassett stepped down from the CEA in mid-2019 but returned to the White House in April 2020 as a “Senior Advisor” to help coordinate the economic response to the COVID-19 pandemic. The administration was desperate to reopen the economy in an election year, and Hassett became the chief advocate for the optimistic case.
In May 2020, the CEA released a chart modeling the daily death toll of the virus. While epidemiological models forecasted a slow, painful decline, Hassett’s chart showed the death curve plummeting rapidly to zero by mid-May. The chart was labeled “Cubic Fit.”
The “Cubic Model” was a simple polynomial regression applied to the time-series data of daily deaths. Because the data had peaked and started to decline, the cubic function extrapolated that downward slope aggressively, driving the line into the ground.
The scientific community was aghast. “This is not a model; it’s a doodle,” one epidemiologist remarked. A cubic fit has no basis in the biological reality of virus transmission; it does not account for R-naught values, susceptibility, or social distancing fatigue.
Hassett defended the chart as a “data smoothing” exercise meant to help the President visualize trends, not a formal prediction. However, the incident severely damaged his reputation among technocrats. It reinforced the narrative that Hassett was willing to use his statistical toolkit to manufacture results that pleased his political masters.
The 2025 Return
On January 20, 2025, Kevin Hassett returned to the West Wing, this time as the Director of the National Economic Council. The NEC Director is the President’s chief economic policy coordinator, a role with significantly more operational power than the CEA Chair. Hassett was no longer just an advisor; he was the conductor of the administration’s economic orchestra.
His mandate was clear: undo the Biden legacy, deregulate the energy sector, and prepare the ground for a new monetary regime.
The Energy Freeze
Hassett wasted no time. On his first full day in office, January 21, 2025, he co-authored Office of Management and Budget Memorandum M-25-11 with Acting OMB Director Matthew Vaeth. The subject was “Guidance Regarding Section 7 of the Executive Order Unleashing American Energy.”
The memo was a bombshell. It directed all federal agencies to “immediately pause the disbursement of funds” appropriated under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. Specifically, it targeted programs related to the “Green New Deal.”
Impact of OMB Memo M-25-11 (Jan 21, 2025)
| Component | Details |
|---|---|
| Authors | Kevin Hassett (NEC), Matthew Vaeth (OMB) |
| Authority | Section 7 of EO “Unleashing American Energy” |
| Action | Immediate freeze on disbursements of IRA/IIJA funds |
| Target | “Green New Deal” initiatives (EV charging, renewables) |
| Mechanism | Agencies must consult OMB/NEC before releasing cash |
The reaction was immediate and furious. Representative Steny Hoyer led a coalition of over 150 House Democrats in sending a letter to Hassett and Vaeth, demanding an itemized list of the frozen projects. They cited “great anxiety” among businesses and communities that had already broken ground on projects like the National Electric Vehicle Infrastructure program.
Hassett’s willingness to use the executive pause—essentially an impoundment of funds—demonstrated a newfound aggression. He was testing the limits of executive power to strangle the green energy transition.
Crypto and Conflicts
In a sharp departure from traditional Republican skepticism of unbacked currencies, the 2025 Trump administration embraced the cryptocurrency industry. Hassett was a key player in this pivot. He oversaw the administration’s support for the “Genius Act,” which created a permissive framework for stablecoins, and the “Anti-CBDC Surveillance State Act,” which sought to ban the Federal Reserve from issuing a digital dollar.
However, this policy advocacy was complicated by Hassett’s personal finances. Financial disclosures revealed that Hassett held a “seven-figure personal investment” in Coinbase, the largest U.S. crypto exchange. Coinbase was actively lobbying for the very legislation Hassett was advancing. Critics noted that the “Genius Act” would directly benefit Coinbase’s business model, raising severe conflict-of-interest questions.
Despite the ethical cloud, Hassett pressed on. He viewed the crypto industry as a vital component of American financial competitiveness and a libertarian bulwark against government overreach. His opposition to a Central Bank Digital Currency was framed in privacy terms.
The Fed Race
As 2025 progressed, the focus in Washington shifted from the NEC to the Federal Reserve. Jerome Powell’s term as Chair was set to expire in May 2026, and the battle to replace him began in earnest.
The Shortlist
By December 2025, the shortlist for the Fed Chairmanship had narrowed. The contenders included:
- Kevin Warsh: A former Fed Governor and son-in-law of billionaire Ronald Lauder
- Scott Bessent: The Treasury Secretary
- Christopher Waller: A sitting Fed Governor
- Michelle Bowman: A sitting Governor
- Kevin Hassett: The NEC Director
Prediction markets like Kalshi and Polymarket told the story. By early December, Hassett’s odds of nomination surged to over 80%. He became known as the “Shadow Chair,” with markets moving on his television appearances as if he were already in charge.
The Powell Conflict
The backdrop to this race was a simmering conflict between the White House and the Powell Fed. Inflation, while down from its 2022 peaks, remained “sticky” around 2.4%—above the Fed’s 2% target. Powell maintained a restrictive policy stance, keeping interest rates high to finish the job.
President Trump, eyeing the 2026 midterms, demanded rate cuts. Hassett became the administration’s attack dog. On CBS’s Face the Nation, he dismissed the Fed’s caution, arguing that “Americans could expect Trump to pick someone who would work to make car loans cheaper.” He openly questioned the integrity of the government’s economic data, suggesting that the Bureau of Labor Statistics was releasing biased numbers that hid the true extent of “Bidenflation.”
This rhetoric alarmed the bond market. In November 2025, senior executives from Wall Street banks met with Treasury officials to express “unease” that a Hassett-led Fed would abandon the inflation fight to please the President. They feared that Hassett would prioritize political loyalty over price stability.
The Selection
In early December 2025, Trump teased reporters that “there is one left” in his selection process, strongly implying Hassett was the choice. Treasury Secretary Bessent confirmed Hassett was on the “short list” but deferred to the President. For all intents and purposes, the campaign was over. Kevin Hassett was the President’s man.
What a Hassett Fed Would Look Like
If confirmed, how would Kevin Hassett run the Federal Reserve? His extensive writings and recent statements provide a clear roadmap. His tenure would likely be defined by three major shifts.
Lower Interest Rates
Hassett is widely categorized as a “dove”—someone who favors lower interest rates. However, unlike liberal doves who focus on employment, Hassett’s dovishness is rooted in supply-side theory.
The Theory: Hassett believes that deregulation and tax cuts create positive supply shocks that increase the economy’s potential output. When potential output rises, the economy can grow faster without generating inflation. Therefore, the Fed can and should run the economy “hotter” (lower rates) to accommodate this new supply.
The Problem: Historically, conservative economists favor the Taylor Rule, a formula that dictates interest rates based on inflation and the output gap. Hassett has praised the Taylor Rule in the past. However, in 2026, a strict Taylor Rule would likely call for higher rates given sticky inflation.
Hassett’s Solution: He will likely argue that the “output gap” is larger than official estimates because the BLS is underestimating the productivity boom from AI and deregulation. This theoretical adjustment would allow him to claim he is following a rule while cutting rates aggressively.
Balance Sheet Expansion
Hassett has been critical of “Quantitative Tightening,” the process of shrinking the Fed’s balance sheet. He argues that the Fed needs to ensure ample liquidity in the Treasury market, especially given the massive issuance of government debt.
Market analysts expect a Hassett Fed to end QT immediately and potentially restart Quantitative Easing by mid-2026. This would involve the Fed buying Treasury bonds to suppress long-term yields. While he would frame this as “market functioning” support, critics would view it as fiscal dominance—the Fed monetizing the debt to help the Treasury fund Trump’s deficits.
Deregulation
Perhaps the most tangible impact of a Hassett chairmanship would be on bank regulation. Hassett is a fierce opponent of the Basel III Endgame, a set of international capital standards proposed by the Barr-led Fed.
The Argument: Hassett views capital requirements as a tax on lending. He argues that forcing banks to hold more capital reduces their ability to lend to businesses, stifling growth.
The Action: As Chair, he would likely scrap the pending Basel III rules. This would be a massive victory for Wall Street banks but a concern for financial stability advocates who see capital as the only buffer against bailouts.
Independence
The most explosive issue is the independence of the Fed. Hassett has walked a fine line. Publicly, he states that “monetary policy needs to be fully independent of political influence,” citing research that politicized central banks cause inflation.
However, his actions tell a different story. By campaigning for the job on TV, attacking the integrity of federal data, and aligning his policy views perfectly with the President’s political needs, Hassett embodies a new form of “soft politicization.” He may not need a formal directive from the White House because he already shares the President’s worldview completely.
Comparison of Fed Regimes
| Feature | Powell Fed (2018–2026) | Potential Hassett Fed (2026–) |
|---|---|---|
| Primary Goal | Inflation Targeting (2%) | Growth Maximization / Supply Side |
| Reaction Function | Data Dependent / Risk Management | Pro-Active / Model Dependent |
| Balance Sheet | Quantitative Tightening (QT) | End QT / Possible Return to QE |
| Regulation | Basel III Endgame (Higher Capital) | Deregulation / Capital Relief |
| Crypto/CBDC | Researching CBDC / Cautious | Anti-CBDC / Pro-Stablecoin |
| Independence | Guarded Jealousy | “Accountable” to Administration |
The Stakes
As the nation looks toward 2026, the figure of Kevin Hassett looms large over the American economic landscape. He is a man of contradictions: a rigorous academic who employs questionable models when convenient; a free marketer who implements tariffs; a central banker who rails against the central bank’s culture.
His potential tenure at the Federal Reserve represents a high-stakes gamble. The “Hassett Bet” is that the U.S. economy has vast, untapped potential that is being stifled by high taxes, heavy regulation, and tight money. If he is right, his policy of low rates and deregulation could unleash a productivity boom that mirrors the “Roaring Twenties,” validating his lifelong optimism.
However, the risks are equally profound. If the structural constraints on the economy are real, if the labor supply is tight and productivity is stagnant, then pouring fuel on the fire with rate cuts and deficits could ignite an inflationary conflagration that no amount of supply-side theory can extinguish.
The bond vigilantes are watching, the crypto markets are waiting, and the printing presses are ready. Kevin Hassett, the happy warrior of the American right, may soon have his hand on the lever of the world economy. Whether this leads to a golden age or a cautionary tale is the question that will define the next decade of global finance.
Our articles make government information more accessible. Please consult a qualified professional for financial, legal, or health advice specific to your circumstances.
