opinion

Two Kevins, One Chair: Who Will be Trump’s Fed Chair Nominee?

By Chris GerlacherJanuary 5, 2026

Going into the new year, the race for the next Fed chair has heated up.

President Trump has narrowed his choices down to two Kevins: Kevin Hassett and Kevin Warsh. Hassett was the favorite since mid-September 2025. Warsh’s odds surged in mid-December, and he has entered 2026 as nearly a coin toss away from the Federal Reserve’s chairmanship.

Warsh’s odds rose from 15% to 50% on Dec. 12, the day after Trump announced that he had narrowed his choices down to Hassett and Warsh. CNBC even reported Warsh as Trump’s leading candidate.

Warsh is a former member of the Federal Reserve Board while Hassett is Trump’s Director of the National Economic Council. Both men favor lower interest rates and faster rate cuts to stimulate the economy, despite opponents’ concerns about higher rates of inflation.

Final announcement could arrive near end of January

Kalshi traders give Trump an 87% chance of announcing his Fed Chair pick before February 2026. Trump only has a 46% chance of making an announcement before Jan. 15. Current Fed Chair Jerome Powell’s term ends in May 2026, so the sooner that Trump announces his next Chair pick, the sooner that future Fed policy will be clarified.
Kalshi traders give Trump an 87% chance of announcing his Fed Chair pick before February 2026. Trump only has a 30% chance of making an announcement before Jan. 15. Current Fed Chair Jerome Powell’s term ends in May 2026, so the sooner that Trump announces his next Chair pick, the sooner that future Fed policy will be clarified.<span data-mce-type="bookmark" style="display: inline-block; width: 0px; overflow: hidden; line-height: 0;" class="mce_SELRES_start"></span>

Ordinary Americans will get some sense of what their mortgage rates could be or how much it may cost to take out a loan. Lowering the cost to borrow money boosts consumer spending. However, it also increases the inflation rate as consumers continue to spend.

Trump has wanted lower interest rates in order to become more popular on economic issues. He’s willing to risk higher inflation later to stimulate consumer spending now.

Trading angles for next Fed Chair

How customers trade in these markets will depend on how they read Trump’s priorities.

Traders who believe Trump will prioritize loyalty and rate‑cut enthusiasm over independence, can buy the candidate who best fits that profile. Conversely, if they think institutional pushback will steer Trump toward a more conventional pick, they may find value fading Hassett (buying “No”).

Warsh is viewed as that more “institutional” choice. He’s a former Fed governor who could make it easily through a Republican Senate confirmation. While he favors the same rate cuts Trump currently desires, Warsh lacks the same perception as an ideologue as Hassett, though he faces the same questions about his independence as Hassett.

Ultimately, traders must decide which likely Fed Chair nominee will do a better job buttering up Trump. If the announcement market is any indication, traders are running out of time to place their trades.