The race for the next Federal Reserve chairman is shifting dramatically, with Kevin Warsh now considered the leading contender according to predictions from the Kalshi forecasting market. As of Monday, Warsh, a former Fed governor, boasts a 47% probability of nomination, a significant jump from 39% just a day prior and a mere 11% as of December 3rd. This surge in support contrasts sharply with the declining prospects of Kevin Hassett, director of the National Economic Council, who now holds a 41% probability, down from 51% on Sunday and 81% on December 3rd. The shift in momentum is largely attributed to a recent report published by CNBC, which highlighted growing resistance to Hassett’s candidacy originating from individuals close to President Donald Trump. This resistance stems directly from concerns that Hassett’s close ties to the current administration could unduly influence the Federal Reserve’s monetary policy decisions.
The narrative surrounding Warsh’s candidacy has been bolstered by recent communications from President Trump himself. Just late Friday, Trump indicated to The Wall Street Journal that Warsh was the preferred choice, although he acknowledged the potential of both “Kevin[s].” Following this statement, Trump reportedly met with Warsh on Wednesday at the White House, where he pressed Warsh for assurances regarding his willingness to advocate for rate cuts. This direct engagement from the President has undoubtedly energized Warsh’s supporters and solidified his position as the frontrunner. Prior to the Wall Street Journal report, however, there had been subtle but persistent anxieties within the financial world regarding Hassett’s suitability for the role. These anxieties were not new, as they had been surfacing within the asset management community.
The most concrete indication of these concerns came from Jamie Dimon, CEO of JPMorgan Chase. During a private conference for asset managers held on Thursday, Dimon publicly expressed his support for Warsh, a move that sent a clear signal to the market. Sources indicated to The Financial Times that Dimon’s backing was particularly influential, bolstering Warsh’s credibility and strengthening his position against Hassett. However, Dimon’s support wasn’t the only worrying sign. Bond investors also voiced their concerns, sharing them directly with the Treasury Department in November. These investors expressed apprehension that Hassett might aggressively reduce interest rates to appease the President, a move that could have significant implications for the broader economy.
In an attempt to distance himself from the President’s potentially overly enthusiastic approach, Hassett offered a more measured response during his appearance on CBS’ Face the Nation on Sunday. When pressed about the influence of the President’s voice on the Federal Open Market Committee, the body responsible for setting monetary policy, Hassett explicitly stated that the President would have “no weight” in the voting process. He clarified that while the President’s opinion would be considered “if it’s good, if it’s based on data,” it would not dictate the committee’s decisions. Hassett emphasized that the committee members would ultimately vote according to their own informed judgments, independent of any political considerations.
The nomination process is currently slated to begin in early 2026, coinciding with the expiration of Jerome Powell’s term, which concludes in May. This extended timeline presents a strategic window for Warsh and Hassett to continue vying for the position, leveraging any further developments in the economic landscape and the evolving dynamics within the White House. The shifting probabilities indicated by Kalshi highlight the intense competition for this crucial role within the Federal Reserve, demonstrating the considerable influence that political considerations can have on the appointment of key economic leaders.
This story was originally featured on Fortune.com.