Fed Chair Candidate List Upended: Hassett Out, Wash Is Top Contender

**January 19 –** White House Economic Advisor and National Economic Council (NEC) Chairman Kevin Hassett recently said publicly that Trump is more likely to want him to stay in his current White House role—a market interpretation that he has effectively withdrawn from the race for the next Federal Reserve chair. After Trump signaled this publicly, prediction markets quickly adjusted their expectations. Data from Kalshi and Polymarket shows former Federal Reserve Governor Kevin Warsh’s probability of becoming the next Fed chair has surged to roughly 60%, leading the pack. Hassett’s odds have dropped to around 15%-16%, while current Governor Christopher Waller is at ~13%-14%. Previously, Warsh and Hassett were neck and neck. Analysts note Warsh has become the “clear frontrunner” for the first time, but Trump’s personnel decisions are notoriously unpredictable, leaving the final outcome uncertain. Other top candidates include Waller and BlackRock executive Rick Rieder. Meanwhile, a judicial probe into the Fed’s headquarters renovation project has added a variable to the chair selection, reigniting market concerns about the central bank’s independence. Treasury Secretary Benson downplayed the impact, saying overall market performance remains stable and the Senate is expected to confirm Trump’s final nominee. Current Fed Chair Jerome Powell’s term ends May 15. Trump has stated he will announce his successor this month but has not provided a specific timeline.