Mon Jan 19 00:40:00 UTC 2026: ### Trump’s Ambiguous Endorsement Shifts Odds in Fed Chair Race

The Story:
President Donald Trump publicly stated his preference to keep Kevin Hassett as National Economic Council Director, a move that has significantly impacted predictions regarding the next Federal Reserve chair. During a recent White House appearance, Trump praised Hassett’s performance and expressed a desire to retain him in his current role. This statement has caused traders to reassess their expectations, with prediction markets now favoring former Fed Governor Kevin Warsh as the leading candidate to replace Jerome Powell when his term ends in May 2026.

Key Points:

  • President Trump publicly expressed his desire to keep Kevin Hassett as National Economic Council Director.
  • Hassett was previously considered a leading contender for the Federal Reserve chair position.
  • Prediction markets, such as Kalshi and Polymarket, have shifted their odds, now favoring Kevin Warsh for the Fed chair role.
  • Warsh’s odds surged to 60% on Kalshi, while Hassett’s dropped to 16%.
  • Other finalists for the position include current Fed Governors Christopher Waller and Michelle Bowman, and BlackRock fixed income chief Rick Rieder.

Critical Analysis:
The primary article and its surrounding context, including the earlier article [“Hassett Says Trump May Be Right to Keep Him Out as Fed Chair”], suggest a strategic dance by the Trump administration. Hassett’s own acknowledgment that he might be better suited where he is, coupled with Trump’s seemingly off-the-cuff remark, could indicate a calculated maneuver to influence market perceptions and potentially drive a desired outcome for the Fed Chair appointment. Trump’s past criticism of the Fed and Powell suggests he seeks a successor more aligned with his economic policies. Publicly downplaying Hassett’s chances could be a deliberate play.

Key Takeaways:

  • President Trump’s public statements significantly influence financial market predictions.
  • The race for Federal Reserve chair remains highly fluid and subject to political considerations.
  • Kevin Warsh has emerged as the apparent frontrunner following Trump’s remarks.
  • Prediction markets are valuable tools for gauging the perceived likelihood of political and economic events.
  • Uncertainty surrounding the Fed Chair appointment continues to create volatility in financial markets.

Impact Analysis:
The selection of the next Federal Reserve chair carries significant long-term implications for U.S. monetary policy and the overall economy. A chair aligned with Trump’s economic vision could lead to lower interest rates and potentially higher inflation. Conversely, a more independent chair could prioritize price stability, even at the risk of slower economic growth. The market’s reaction to the announcement, once made, will be a crucial indicator of confidence in the chosen candidate and the future direction of the Fed. The direction the markets take will define Trump’s legacy.

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