Kevin Warsh Emerges as Fed Chair Front-Runner After Trump Signals Hassett Is Out

The race to lead the U.S. central bank is taking a sharp turn. Kevin Warsh’s chances of becoming the next Federal Reserve chair have jumped after Donald Trump suggested that his economic adviser Kevin Hassett is unlikely to succeed Jerome Powell.

Trump cools on Hassett, Warsh gains momentum According to prediction market data, Warsh has become the clear favorite to take over as Fed chair, with his nomination odds rising to around 56%. That places the former Federal Reserve governor firmly at the top of the field.

The shift followed Trump’s remarks at a rural health policy event, where he addressed speculation around Hassett’s future. Referring to his top economic adviser, Trump said he would prefer to keep Hassett in his current role at the White House, highlighting his strong communication skills. Trump also remarked that current Fed officials “don’t talk very much,” contrasting that with Hassett’s ability to communicate effectively.

A dramatic reversal from late 2024 The development marks a significant reversal. Until early December last year, Hassett had been the dominant favorite to replace Powell, with his odds climbing above 80%. As the year drew to a close, however, the race tightened, and Hassett’s probability dropped below 50%. Following Trump’s latest comments, his chances now sit at roughly 16%. Meanwhile, Warsh has steadily moved into pole position. Trump has also indicated that he largely agrees with Warsh on monetary policy, particularly on the need for lower interest rates.

Other contenders remain in play Trump’s remarks have also reshaped expectations around other candidates. Federal Reserve Governor Chris Waller is now viewed by some market participants as a more likely choice than Hassett, with his odds estimated at about 16.2%. Another name attracting attention is Rick Rieder, the chief investment officer at BlackRock. His chances are estimated at around 7% and have improved after he publicly supported cutting interest rates to roughly 3%.

Lower rates as a common theme Hassett, Waller, and Rieder have all voiced support for lower interest rates, aligning closely with Trump’s long-standing preference for looser monetary policy. Warsh, by contrast, has been more reserved in public about rate cuts. Even so, Trump has stated that the former Fed governor broadly shares his views on the direction of interest rates. While the contest for the Fed’s top job is still unfolding, Trump’s latest signals have clearly shifted momentum. For now, Kevin Warsh appears to be the leading candidate to shape U.S. monetary policy in the years ahead.

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