Prediction markets see Hassett, Warsh as Fed chair front-runners
President Donald Trump’s recent remarks regarding potential candidates to succeed Jerome Powell as the next chair of the Federal Reserve have caused quite a stir in prediction markets. The names of National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, and Treasury Secretary Scott Bessent have all surfaced as possible contenders for the position.
During an interview on CNBC’s “Squawk Box,” Trump expressed admiration for Hassett and Warsh, while disclosing that Bessent has withdrawn himself from consideration, content in his current role as Treasury Secretary. Trump praised Warsh, stating, “He’s very good. Sometimes they’re all very good, until you put them in there, and then they don’t do so good. But … I think he’s a very good guy. I’d say Kevin and Kevin, both Kevins are very good.”
Following Trump’s comments, prediction market Kalshi saw a rapid shift in betting odds, with both Hassett and Warsh each given a 35% chance of being appointed as the next Fed chair. Waller, although not mentioned by Trump, has a 15% probability of being selected, though his odds decreased slightly after the interview.
Both Hassett and Warsh have advocated for lower interest rates, a stance that contrasts with Powell’s approach of maintaining relatively high rates. Powell, whose term extends until May 2026, has faced criticism from Trump for his monetary policies.
In a surprising development, Fed Governor Adriana Kugler announced her resignation, effective immediately, which Trump described as a “pleasant surprise.” This vacancy allows Trump to nominate a new member to the Fed Board of Governors, potentially paving the way for that individual to assume the role of chairman when Powell’s term concludes.
On Kalshi, Judy Shelton, a former economic advisor to Trump, has a 6% chance of replacing Powell, while David Malpass, a former government official who led the World Bank Group from 2019 to 2023, holds a 4% probability on the prediction market. Interestingly, Trump himself even garnered a 1% vote as a potential Fed chair on Kalshi.
The speculation surrounding Powell’s successor continues to evolve, with various contenders vying for the prestigious position at the helm of the Federal Reserve. As the anticipation grows, market observers eagerly await Trump’s final decision on who will lead the central bank into the future.
