Kevin Hassett, director of the National Economic Council, addressed the media outside the White House in Washington, DC, USA, on Friday, Oct. 24, 2025. The event was captured by Francis Chung for Bloomberg and Getty Images.
President Donald Trump has decided on his pick for the new Federal Reserve chair but remains tight-lipped about the announcement. While prediction markets seem confident in their speculations, the frontrunner, Kevin Hassett, maintains discretion. Even though clarity on the appointment is expected imminently, the environment the new chair will navigate remains unpredictable, especially as the U.S. economy faces potential turning points. Bloomberg News recently highlighted Hassett as the favored candidate in a five-person race to replace the current Chair Jerome Powell, whose term ends in May. When asked about the situation on Sunday, President Trump, aboard Air Force One, confirmed, "I know who I am going to pick, yeah. We'll be announcing it." However, when questioned directly about Hassett, Trump merely smiled and remarked, "I'm not telling you, we'll be announcing it." Hassett, also making media appearances over the weekend, avoided giving a definitive answer regarding his potential appointment. Alongside Hassett in the race are current Governors Christopher Waller and Michelle Bowman, former Governor Kevin Warsh, and BlackRock fixed income chief Rick Rieder.
During an appearance on CBS' "Face the Nation," Hassett expressed his honor at being among a group of strong candidates. He acknowledged the positive market reactions to his consideration as the frontrunner, asserting that Americans "could expect President Trump to pick somebody who's going to help them, you know, have cheaper car loans and easier access to mortgages at lower rates." Later, on Fox News, Hassett commented, "If he picks me, I'd be happy to serve." Prediction markets have shown significant activity, with Kalshi traders assigning a 79% probability for Hassett to secure the position, while PredictIt and Polymarket reflected probabilities of 75% and 63% respectively, as of Monday afternoon. Meanwhile, a "no announcement by Christmas" scenario emerged as a strong alternative, garnering a 22% probability.
A Divided Fed
The incoming Federal Reserve chair will confront a split within the institution, with some officials advocating for further interest rate cuts to preclude labor market issues, while others remain concerned about persistent inflation that might worsen with additional monetary easing. For the upcoming rate decision on Dec. 10, futures market traders are reflecting an 87.6% likelihood of a rate cut amid volatile trading. President Trump and his administration have consistently advocated for lower rates, establishing this as a criterion for the next chair. Looking to 2026, the rotating group of regional presidents who vote on the Federal Open Market Committee will lean toward a hawkish stance, favoring anti-inflation measures and stable rates. However, the new Fed leadership faces challenges beyond rate adjustments. Treasury Secretary Scott Bessent, leading the selection process, indicated in a CNBC interview the need to reassess the Fed's broader mission. "We've gotten to this point where monetary policy has gotten very complicated, and it's more than just cutting rates," Bessent stated. "I think we've got to kind of simplify things."
Call for Reform
Bessent particularly emphasized the role of regional presidents. Although their influence is relatively limited compared to the chair and Board of Governors in shaping rate policy and other monetary decisions, their public statements can have significant market impacts. He highlighted this as part of broader concerns regarding the Fed's expanded influence on the economy and financial markets since the financial crisis.