Former US Federal Reserve President Kevin Warsh attends the Spring Meetings of the International Monetary Fund (IMF) and World Bank at IMF Headquarters in Washington, DC, USA, on Friday, April 25, 2025.
Tierney L. Cross | Bloomberg | Getty Images
Prediction markets swung wildly on Friday after President Donald Trump said Kevin Warsh was his top candidate to become the next Federal Reserve Chairman.
As for Kalsi, Warsh’s odds jumped from about 15% to 40% after President Trump told the Wall Street Journal that Warsh was the front-runner. Meanwhile, the implied probability that National Economic Council Chairman Kevin Hassett will become the next Fed chairman has dropped from 80% a while ago to below 60%.
Trump was asked directly whether Warsh was now his first choice, and he responded, “Yes, I think so,” the newspaper said. This comment immediately resonated in prediction markets.
President Trump hinted that Hassett remains a strong candidate and that the NEC chief is still leading Kalsi’s race.
President Trump said, “I think we have Kevin and Kevin. Both of them. I think both Kevins are great.”
Mr. Hassett had been the market’s clear favorite for several months, but his odds had declined by Friday afternoon as investors priced in Mr. Trump’s latest signals.
Other candidates considered included current governors Christopher Waller and Michelle Bowman, as well as Rick Rieder, a fixed income manager at BlackRock. They were the last of a group of 11 candidates being considered for the position. Kalsi effectively eliminated his chances of getting the top job.
President Trump also reiterated on Friday his long-held view that the Fed chair should consult with the president on interest rate policy. President Trump has been at odds with current Fed Chairman Jerome Powell, who continues to advocate lowering interest rates. The Fed has cut the federal funds rate by three-quarters of a percentage point since September.
