CNBC: Trump confidant blocks Kevin Hassett from becoming Federal Reserve Chair! Kevin Warsh leads the forecast market with nearly a 50% chance of winning

U.S. White House National Economic Council Director Kevin Hassett, originally seen by the market as a top contender for the next Federal Reserve Chair, was even once predicted to be Trump’s “almost certain” choice. However, recent developments have shifted the situation, and Hassett’s prospects for nomination are no longer as certain.
(Background: Trump named Kevin Warsh as his “preferred” candidate for the next Fed Chair, causing Hassett’s chances to drop by 30%)
(Additional context: Trump: Rate cuts are a test for the Fed Chair, and tariffs may be adjusted to lower the prices of some goods)

U.S. White House National Economic Council Director Kevin Hassett, originally seen by the market as a top contender for the next Federal Reserve Chair, was even once predicted to be Trump’s “almost certain” choice. On prediction markets Kalshi and Polymarket, investors also once gave him over an 80% chance of winning.

Hassett’s chances of being selected plummet

However, recent developments have shifted the situation, and Hassett’s prospects for nomination are no longer as certain. The turning point first occurred on December 12. On that day, Trump told The Wall Street Journal in an interview that former Fed Governor Kevin Warsh had risen to the top of the candidate list, tying with Hassett. He referred to these two candidates as “the two Kevins,” praising, “I think both Kevins are great.” This statement surprised the market, as Hassett had been considered the frontrunner. Trump’s remarks also quickly reflected in prediction markets, with Hassett’s probability declining from its peak, while Warsh’s surged.

The latest development comes from CNBC’s report on December 15. According to sources familiar with the matter, Hassett’s candidacy faces resistance, with some high-level advisors close to Trump expressing concerns. These advisors pointed out that Hassett’s close relationship with Trump might initially have made him a leading candidate, but now could be perceived as him being a “puppet of the president.” This perception could trigger a bond market rally, pushing long-term interest rates higher, which would run counter to Trump’s usual goal of maintaining low interest rates.

However, sources also indicated that this opposition is more in the form of supporting Warsh rather than directly criticizing Hassett. Nonetheless, the news caused noticeable volatility in prediction markets: on Polymarket, Warsh’s chances of being nominated by Trump have reached 48%, surpassing Hassett’s 44%; on Kalshi, Warsh’s probability has risen to 49%, while Hassett’s has fallen from a high of 81% to 41%.

The current Chair, Jerome Powell, will serve until May 2026, and Trump is expected to officially announce his nominee in early 2026.

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