Wall Street’s top parlor game took a sudden turn on Monday, when the prediction market Kalshi showed Kevin Warsh is now the frontrunner to be nominated as the next Federal Reserve chairman, overtaking Kevin Hassett.
Warsh, a former Fed governor, now has a 47% probability, up from 39% on Sunday and just 11% on Dec. 3. Hassett, director of the National Economic Council, has fallen to 41%, down from 51% on Sunday and 81% on Dec. 3.
A report from CNBC saying Hassett’s candidacy was running into pushback from people close to President Donald Trump seemed to put Warsh on top. The resistance stems from concerns Hassett is too close to Trump.
That followed Trump’s comment late Friday, when he told The Wall Street Journal Warsh was at the top of his list, though he added “the two Kevins are great.”
According to the Journal, Trump met Warsh on Wednesday at the White House and pressed him on whether he could be trusted to back rate cuts.
The report surprised Wall Street, which had overwhelming odds on Hassett as the favorite, lifting Warsh’s odds from the cellar.
But even prior to the Journal story, there have been rumblings in the finance world Hassett wasn’t their preferred choice to be Fed chair.
At a private conference for asset managers on Thursday, JPMorgan Chase CEO Jamie Dimon signaled support for Warsh and predicted Hassett was likelier to support Trump on more rate cuts, sources told the Financial Times.
And in a separate report earlier this month, the FT said bond investors shared their concerns about Hassett with the Treasury Department in November, saying they’re worried he would cut rates aggressively in order to please Trump.
Trump has said he will nominate a Fed chair in early 2026, with Jerome Powell’s term due to expire in May.
For his part, Hassett appeared to put some distance between himself and Trump during an appearance on CBS’ Face the Nation on Sunday.
When asked if Trump’s voice would have equal weighting to the voting members on the rate-setting Federal Open Market Committee, Hassett replied, “no, he would have no weight.”
“His opinion matters if it’s good, if it’s based on data,” he explained. “And then if you go to the committee and you say, ‘well the president made this argument, and that’s a really sound argument, I think. What do you think?’ If they reject it, then they’ll vote in a different way.”