Chances of a former Fed governor taking the top seat appear to be surging
As recently as early last month, odds were soaring on Kevin Hassett’s chances of becoming President Trump’s pick to lead the Federal Reserve when current chair Jerome Powell’s term expires in May.
Comments by the president at the time strongly suggested Kevin Hassett, his current National Economic Council director, was first in line to succeed Powell. But Trump appears to be having second thoughts – and betting markets are now pivoting to another frontrunner as his likely choice.
After Trump said Friday he would rather keep Hassett in his current role, traders on predictions market site Kalshi instead turned their attention to former Fed governor Kevin Warsh, whose chances of getting the job spiked to 60% compared with Hassett’s 16%.
“I actually want to keep you where you are, if you want to know the truth,” Trump said, addressing Hassett during an appearance in the White House. “We don’t want to lose him,” Trump said, addressing his chief of staff Susie Wiles, “but we’ll see how it all works out.”
Warsh’s surge marked a dramatic development in the race for Fed chair, which has been presided over by Treasury secretary Scott Bessent in consultation with Trump and commerce secretary Howard Lutnick.
Warsh, a 55-year-old former bank executive, served on the Fed’s Board of Governors between 2006 and 2011. He was the main conduit between the central bank and Wall Street during and immediately after the 2008 financial crisis, and was reportedly a candidate for the top job at the Treasury before Trump tapped Bessent.
It’s still unclear when Trump plans to announce Powell’s successor, although the president has hinted a decision would arrive early this year.
Controversy erupted Sunday after the Fed chair – with whom Trump has frequently clashed on interest rate policy – announced he and the central bank faced a criminal probe by the Department of Justice over comments made by Powell about renovations to the Fed’s headquarters.
That sparked speculation that Trump might try to fire Powell after attempting to dismiss Fed governor Lisa Cook from her job when she was accused of mortgage fraud. A legal challenge by Cook to that move is ongoing.
But on Wednesday, Trump denied he intended to oust Powell. “I don’t have any plans to do that,” he told Reuters in an interview, but added that the administration was in “a little bit of a holding pattern with him, and we’re going to determine what to do.”
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