Who will be the next Fed Chair? Wall Street shows its stance! JPMorgan CEO Jamie Dimon supports Kevin Warsh over Gary Cohn.

At a private conference JPMorgan CEO Jamie Dimon endorsed former Fed governor Kevin Warsh for Fed chair and warned that Kevin Hassett’s perceived readiness to follow White House pressure for aggressive short‑term rate cuts could prompt a market backlash that raises long‑term borrowing costs. Dimon argued the Fed only controls short rates while markets set long yields, noting the 10‑year Treasury yield has risen from about 4.0% to 4.2% since Hassett emerged as a frontrunner and the 5y5y forward inflation swap has climbed roughly 6 basis points, signaling growing inflation concerns. Investors overseeing roughly $30 trillion of Treasuries have voiced similar credibility worries to officials as the Trump administration, led by incoming Treasury Secretary Scott Bessent, interviews Warsh and Hassett, a choice that will test the Fed’s perceived independence versus White House loyalty.

Analysis

JPMorgan CEO Jamie Dimon publicly endorsed former Fed governor Kevin Warsh as a preferable Fed chair at a private asset management conference and warned that former White House economist Kevin Hassett’s perceived willingness to align with the White House on aggressive short-term rate cuts could undermine monetary credibility. The article notes Trump favors loyalty and aggressive cuts, has shortlisted Warsh and Hassett, and that incoming Treasury Secretary Scott Bessent is leading additional interviews this week.

Market pricing already reflects these appointment risks: since late-November reporting that Hassett was the frontrunner, the 10-year U.S. Treasury yield rose from about 4.0% to 4.2%, and the 5y5y forward inflation swap climbed roughly 0.06 percentage points to a one-month high. Senior investors managing roughly $30 trillion of Treasuries have expressed direct concerns to officials, signaling elevated inflation expectations and potential risk-premium repricing.

If a chair perceived as politically compliant were chosen, short-term policy easing could be attempted but long-term yields—set by market expectations—may instead increase, raising borrowing costs and volatility for rate-sensitive assets. Investors should treat the Fed chair selection as a material macro catalyst, monitor yield and forward-inflation moves closely, and expect higher term-premia and greater market sensitivity to Fed-independence cues until a decision is announced.

Key Decisions for Investors

• Reduce net duration exposure or hedge with Treasury futures/puts to guard against further rises in 10-year yields
• Monitor nominee developments, the 10-year yield and 5y5y forward inflation swaps as primary market signals and be prepared to tighten risk exposures if inflation expectations continue to climb
• Trim or hedge rate- and duration-sensitive equity and credit positions and consider reallocating to short-term high-quality instruments until Fed-independence risk resolves