What's Happening?
Kevin Hassett, the director of the National Economic Council, has regained the lead over Kevin Warsh in the prediction markets for the position of Federal Reserve chairman. As of December 16, 2025, Hassett holds
approximately 53% odds on Kalshi and 54% on Polymarket of being nominated, compared to Warsh's 34% and 36% respectively. This shift comes after Hassett emphasized the importance of the Federal Reserve's independence and the need for consensus-based decision-making. Despite President Trump's influence, Hassett stated that Trump's opinion would not weigh on his decisions as Fed chairman, although he acknowledged Trump's strong views on economic policy. The race has seen fluctuations, with Warsh briefly leading earlier in the week, but concerns about Hassett's perceived closeness to Trump have been raised by Wall Street figures.
Why It's Important?
The selection of the next Federal Reserve chairman is crucial as it will influence U.S. monetary policy and economic direction. The chairman's stance on interest rates and economic independence can significantly impact financial markets, inflation, and employment rates. Hassett's lead in prediction markets suggests confidence in his ability to maintain the Fed's independence, a key concern for investors and policymakers. However, his perceived closeness to President Trump raises questions about potential bias in decision-making. The outcome of this race will affect not only the U.S. economy but also global markets, as the Fed's policies have far-reaching implications.
What's Next?
President Trump is expected to conduct final interviews with prospective candidates, including Hassett and Warsh, before making a decision. The president has indicated he already knows his choice, but the ongoing market predictions and public statements by the candidates suggest the decision is still open. The final selection will likely be announced soon, with significant attention from financial markets and political observers. The new chairman will face immediate challenges, including managing interest rates and addressing economic uncertainties.
