The change of the Federal Reserve Chairman will undoubtedly be one of the most watched events in US politics in 2026. Current Chairman Jerome Powell's term will end in May 2026. President Trump has repeatedly criticized Powell for his slow pace of interest rate cuts and is actively selecting a new chairman who better aligns with his economic policy philosophies, particularly emphasizing his desire for a next chairman who will support rapid and substantial interest rate cuts to stimulate economic growth.
Previously, Kevin Hassett, director of the White House National Economic Council, was far ahead on the shortlist, and market and forecasting platforms were almost certain he would be nominated. However, this situation has recently taken another turn for the worse.
Kevin Walsh's chances of being selected have increased.
According to a report by The Wall Street Journal yesterday (13th), when interviewed, Trump was directly asked whether former Federal Reserve Governor Kevin Warsh was at the top of the list of candidates for Federal Reserve Chairman. He answered clearly, "Yes, I think he is." Trump then mentioned a leading candidate, Hassett, saying, "I think both Kevins are great." He added that there were "several other very good candidates," indicating that the final decision has not yet been made.
It's worth noting that this statement came after Trump's 45-minute meeting with Warsh on Wednesday. Reports indicate that Warsh expressed support for further interest rate cuts during the meeting, which aligns closely with Trump's consistent stance of advocating for rapid and significant rate reductions.
Predicting a rapid market reaction
As a result, the prediction market experienced significant fluctuations: on the Polymarket platform, the probability of Warsh being nominated by Trump rose sharply from about 7% to 38%, while the probability of Hassett fell from a high of 85% to 52%; on the Kalshi platform, the probability of Warsh being nominated rose from 10% to 42%, while the probability of Hassett fell from a high of 81% to 52%.
It is also worth mentioning that Jamie Dimon, a heavyweight figure on Wall Street and CEO of JPMorgan Chase, had previously publicly supported Warsh as the next chairman of the Federal Reserve, calling him a "great chairman" and believing that Warsh would be better able to maintain the independence of the Federal Reserve.
Although Hassett currently leads the prediction market by about 10%, Warsh's surge proves the race is far from over. Trump is expected to make a final decision within weeks, and this contest between the "two Kevins" will lay the groundwork for the most critical political test in 2026 regarding the independence of the Federal Reserve and the path of interest rates in the post-Powell era.
