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President Donald Trump indicated Friday that he would prefer to keep National Economic Council Director Kevin Hassett in his current role as top economic advisor, a statement that has shifted expectations in the race to succeed Jerome Powell as Federal Reserve chair. The announcement sent traders on prediction markets quickly recalibrating, elevating former Fed Governor Kevin Warsh as the likely successor.

Trump’s Remarks and the Fed Chair Race

Speaking at the White House, Trump praised Hassett’s recent public appearances, stating, “I actually want to keep you where you are, if you want to know the truth.” Hassett has been widely considered a leading contender to replace Powell, competing against Warsh and other finalists including current Fed Governors Christopher Waller and Michelle Bowman.

Trump has been openly critical of the Federal Reserve’s policies and has indicated his intent to appoint a successor before Powell’s term ends in May. While he has not confirmed a specific date for the announcement, his comments on Hassett suggest a potential pivot toward Warsh as the frontrunner.

Market Reactions and Predictions

Following Trump’s remarks, traders on the predictions market Kalshi raised the odds of Warsh becoming Fed chair to 60 percent, up from a near tie with Hassett just days earlier. Hassett’s chances fell to 16 percent, with Waller at 14 percent. Similar trends were observed on Polymarket, where Warsh leads at 60 percent, Hassett trails at 15 percent, and Waller at 13 percent. Odds for other finalists, including BlackRock fixed income chief Rick Rieder and Bowman, remain minimal.

Krishna Guha, head of global policy and central bank strategy at Evercore ISI, noted that Trump’s statements are not definitive but may indicate a clear shift in the front-runner position. “The President has given various signals at various times and appears to enjoy the drama of this Celebrity Apprentice season, but Warsh appears to be the clear front-runner for the first time,” Guha wrote.

Implications for U.S. Monetary Policy

Warsh’s potential appointment signals a possible shift toward a more market-focused Federal Reserve approach, contrasting with Hassett’s current advisory emphasis. Investors and analysts are closely monitoring developments, as the decision will influence interest rates, inflation management, and broader financial markets ahead of the 2026 midterms.

Trump’s statement also underscores the political dimension of the appointment, highlighting the interplay between presidential preferences, market expectations, and congressional oversight in shaping U.S. monetary leadership. The coming weeks are expected to provide further clarity as Trump finalizes his decision and signals the future trajectory of U.S. economic policy.

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