Kevin Hassett, once seen as a leading candidate to succeed Jerome Powell as Federal Reserve chair, has faced recent scrutiny from senior figures close to former President Donald Trump, CNBC reports citing people familiar with the matter. The tension stems from Hassett's close ties to Trump, which initially favored him but now raise concerns, potentially explaining why candidate interviews were canceled and rescheduled in early December, with former Fed governor Kevin Warsh completing his interview last week. Trump told reporters he had decided on a Fed chair pick, but said in a Friday interview with The Wall Street Journal that both Hassett and Warsh are the final contenders, surprising markets and sending Kalshi prediction market odds for Hassett lower to 51% on Monday from over 80% earlier this month, while Warsh's odds rose from about 11% in early December to 44%.

Federal Reserve Governor Milan said on Dec. 15 that the Fed's current policy stance is excessively restrictive and the inflation outlook appears favorable, BlockBeats reports. He expects housing inflation to ease as rent increases retreat from COVID-19 peaks toward normal levels, and argued that cooling in the labor market makes a renewed pickup in services inflation less likely. Milan noted that labor-market deterioration can be rapid and hard to reverse due to monetary policy lags of several quarters, reiterating that easing policy sooner would move the stance closer to neutral.