Prediction markets favor Hassett, Warsh as Trump's top picks for Fed chair

Prediction market Kalshi now prices Kevin Warsh at a 42% chance (up 27 percentage points this week) and Kevin Hassett at a 50% chance (down 20 points) to succeed Jerome Powell when his Fed term ends in May 2026, with roughly $10.2 million wagered on the market. President Trump publicly named both Hassett—his National Economic Council director and longtime economic adviser—and former Fed governor Kevin Warsh—an ex-Morgan Stanley banker and prior Fed contender—as his leading choices, narrowing the contest for Fed chair and underscoring the market’s effort to signal the likely direction of future monetary policy depending on the outcome.

Analysis

Prediction market Kalshi now prices Kevin Hassett at a 50% chance and Kevin Warsh at 42% to succeed Jerome Powell when his Fed term ends in May 2026, with Warsh’s probability rising 27 percentage points this week while Hassett’s fell 20 points; total trading volume on the market is about $10.2 million. President Trump publicly named both Hassett, his National Economic Council director and longtime adviser, and Warsh, a former Fed governor and ex-Morgan Stanley banker, as his leading candidates, saying "Kevin and Kevin" are his top choices and narrowing the field in public view. Warsh’s rebound in odds follows his prior consideration for top policy roles (he was a 2017 Fed contender and was recently discussed for Treasury secretary), while Hassett’s position reflects his close policy alignment with the president and campaign role. The market move and Trump’s comments matter because they compress policy uncertainty around the Fed chair succession and are being used by traders to price potential shifts in monetary policy; however, prediction-market odds are sentiment signals not guarantees and nomination and Senate confirmation risk remain material factors to watch.

Key Decisions for Investors

• Monitor Kalshi odds and trading volume as a near-term market sentiment indicator for Fed succession probabilities and use material shifts to reassess short-dated rate exposure
• Reduce duration risk or add explicit rate hedges (short-duration bonds, interest-rate swaps or options) ahead of heightened nomination and confirmation uncertainty given the potential for policy-path repricing
• Follow White House signals and the Senate confirmation timeline closely and avoid concentrated directional bets in rate-sensitive positions until a nominee is formally announced and market-implied odds stabilize