Some policy analysts don’t believe the markets would tolerate a dual Fed-Treasury head because it would subvert the central bank’s independence.
“I don’t think the market would react [well] to that. Even if it was someone they respected, it just too overtly undermines the independence of the Fed,” Stephen Myrow, a managing partner at Beacon Policy Advisors, told The Hill. “I don’t think they would do that.”
Bond markets got woozy in response to Trump’s trade policies earlier this year, and the administration course-corrected as a result.
National Economic Council chief Kevin Hassett said the White House moved up its pause of wide-ranging “reciprocal” tariffs after the bond market cratered.
By undermining Fed independence with a dual Fed-Treasury chair, the worry is that Bessent will bend to Trump’s calls to cut interest rates and that the Fed will be more tolerant of inflation, similar to the dynamic between former President Nixon and his Fed chair, Arthur Burns.
The Hill’s Tobias Burns has more here.
