Buyers uneasy about Fed chair frontrunner

Good morning and welcome back. In today’s newsletter:

• Bond investors worried about Kevin Hassett Fed chair candidacy

• EU to launch probe into WhatsApp’s AI feature

• France’s Macron warns of ‘disintegration’ risk to world order

• UK universities restrict applications from Pakistan and Bangladesh

We begin in the US, where bond investors have told the Treasury they are concerned about Kevin Hassett’s potential appointment as Federal Reserve chair, worrying he will cut interest rates aggressively to please President Donald Trump.

What to know: The Treasury department solicited feedback on Hassett and other candidates in one-to-one conversations with Wall Street executives, according to several people familiar with the discussions.

Hassett, the White House’s top economic official, has emerged in recent weeks as a frontrunner to replace Jay Powell as head of the US central bank.

Several of those contacted by the Treasury said they were worried Hassett could push for a cut in interest rates even if inflation continues to run above the Fed’s 2 per cent target, according to three people familiar with the conversations.

Why it matters: The doubts about Hassett reflect a broader anxiety on Wall Street about the transition at the Fed’s helm. Some senior market participants would have preferred other candidates such as BlackRock’s chief investment officer Rick Rieder and Fed governor Christopher Waller who were seen as more independent from Trump than Hassett, the people said. Read this exclusive in full.

Here’s what else we’re keeping tabs on today:

• Russia-India relations: President Vladimir Putin arrives in New Delhi today for his first visit to the country since December 2021.

• Results: Frasers, Hewlett Packard Enterprise, Kroger, Toronto-Dominion Bank and Watches of Switzerland report earnings.

Five more top stories

1. Exclusive: The European Commission is planning a new antitrust investigation into Meta over the rollout of artificial intelligence features within its popular messaging service WhatsApp, in the EU’s latest challenge to Big Tech. Read more on the expected probe.

2. France’s President Emmanuel Macron has warned of the risk of the “disintegration of the international order” as he met Chinese leader Xi Jinping in Beijing amid growing trade tensions between the exporting superpower and Europe. Read the full report.

3. HSBC’s choice of Brendan Nelson as its chair concludes a seven-month search process that has raised questions about governance and succession planning at Europe’s largest lender. 

4. UK universities are restricting the number of applicants from Pakistan and Bangladesh due to visa abuse concerns and tougher Home Office rules. At least nine higher education institutions have cut back on students coming from “high-risk” countries.

5. President Trump’s push for peace in the border regions of the Democratic Republic of Congo will reach a critical moment today when the Congolese and Rwandan presidents are due at the White House to sign an accord. Here’s what to expect.

News in-depth

Ursula von der Leyen unveiled a proposal yesterday to use emergency measures to ram through up to €210bn in loans to Ukraine. Critics said the European Commission president was breaking EU laws. Others said the audacious move showed that the bloc is finding it harder to identify ways to help shore up Kyiv’s finances.

We’re also reading and listening to . . . 

Chart of the day

Europe’s low-cost airlines are preparing to re-enter war-torn Ukraine as soon as a peace deal is signed that allows its airports to open to travellers again — as they predict a boom from “catastrophe tourism” as well as people returning to the country.  

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Take a break from the news . . . 

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