Topline
President Donald Trump is set to announce former Federal Reserve official Kevin Warsh as his choice to replace Jerome Powell as the chair of the central bank, multiple reports said, as Trump himself announced he will name his pick on Friday morning.
Key Facts
The Wall Street Journal reported that Trump’s advisers have been informed about Trump’s decision, and this was also corroborated by the New York Times and Bloomberg.
Warsh has been among the four top contenders for the role, but the Times and Bloomberg noted that no decision was final until Trump makes his announcement on Friday morning.
Speaking to reporters at the screening of First Lady Melania Trump’s self-titled documentary, “Melania,” Trump said he’ll make the announcement on Friday morning.
Warsh was considered a contender for the job eight years ago, when Trump chose Powell, and the president appeared to allude to this, saying: “A lot of people think that this [his pick] is somebody that could’ve been there a few years ago.”
Warsh previously served on the Federal Reserve’s Board of Governors from 2006 to 2011.
How Have The Betting Markets Reacted?
In late December, the online betting markets predicted that National Economic Council Director Kevin Hassett was the front-runner to replace Powell as Federal Reserve chair. However, the odds began shifting in Warsh’s favor since the start of the new year. Hassett’s odds peaked at around 84% on Polymarket in December, and now he’s down to 1%. At the start of this week, BlackRock executive Rick Rieder was the prediction markets’ favorite with bookmakers on Kalshi, giving him a 50% chance compared to Warsh’s 29%, with Polymarket bettors giving them similar odds. However, since Trump’s remarks on Thursday night, both markets have swung in Warsh’s favor, with bookmakers predicting he now has a 94-95% chance of getting the nomination. Trading volume for bets on the Federal Reserve Chair crossed $307 million on Polymarket and $90 million on Kalshi.
Key Background
Powell has been one of Trump’s top targets for criticism and ridicule since the president started his second term last year, disagreeing with the majority of the chair’s decisions. Trump’s Department of Justice launched an investigation into Powell, who cannot be simply fired by the president, this month over alleged false statements he made in testimony about a $2.5 billion renovation of the Federal Reserve’s headquarters, which Powell has vehemently denied. Former Fed Governor Kevin Warsh, member of the Federal Reserve Christopher Waller, National Economic Council chief Kevin Hassett and BlackRock executive Rick Rieder are possible candidates to take over for Powell, who has not yet confirmed if he will stay on the Fed board following his term as chair.
Further Reading
Trump Claims US Should Pay World’s ‘LOWEST’ Interest Rates After Fed Paused Cuts (Forbes)
Why The Trump Administration’s Investigation Against Jerome Powell May Not Succeed (Forbes)
