On Friday, President Donald Trump mentioned that Kevin Warsh has ascended to the top position on his list for the next Federal Reserve chair, although other candidates are still viable, as reported by the Wall Street Journal.
Initially part of Trump’s shortlist but not leading, Warsh, also a former Fed governor, has seemingly gained favor after a discussion on Wednesday with the president.
“Yes, I believe he is,” Trump affirmed to the publication when queried if Warsh was the frontrunner, based on a report published Friday afternoon.
Referring to National Economic Council Director Kevin Hassett, previously forecasted by prediction markets as the frontrunner, Trump remarked, “I see you have two Kevins. Both are fantastic.”
“I think there are a few other individuals who are excellent,” the president added.
Hassett became the lead candidate after a report from Bloomberg News. Publicly, he has taken a reserved stance when queried about accepting the position, stating he would serve if requested. Sen. Elizabeth Warren (D-Mass.) expressed concern on Thursday during a CNBC segment that Trump might appoint a “sock puppet” as the Fed chair to follow his directives.
Emphasizing the increased likelihood of Warsh being chosen, Trump reiterated a previous claim that the Fed chair should discuss interest rate decisions with the president.
“Typically, that’s not practiced anymore. It used to be standard. It should be reinstated,” he commented. “I possess a wise perspective and should be heeded.”
Trump has frequently clashed with the current chair, Jerome Powell, almost immediately after nominating him for the role in 2017. Resorting to personal criticisms and name-calling, Trump has pressured the Fed to decrease interest rates, expressing dissatisfaction with the current rate reductions that have seen the central bank trim its key rate by three-quarters of a percentage point since September.
The Fed most recently reduced rates on Wednesday, bringing the benchmark federal funds rate to a range of 3.5%-3.75%, which Trump believes should be reduced even further.
Trump pointed out that Warsh largely aligns with his views on monetary policy.
“He believes that interest rates must be decreased,” Trump stated. “And so does everyone else I’ve spoken to.”
Following the Journal report, prediction markets shifted. Initially predicting Hassett had around a 71% chance of being nominated, that fell to 62%, while Warsh’s chances rose to 36%, per Kalshi.
Trump allowed for the possibility of changing his decision, noting he has several strong candidates in front of him.
“I think I have a person who I prefer,” he said. “I like them all, but I want to proceed cautiously because I received a poor recommendation” when appointing Powell.
Throughout the year, Trump has consistently blamed former Treasury Secretary Steve Mnuchin for endorsing Powell. The current Treasury Secretary, Scott Bessent, has been leading the current search efforts. Trump has openly expressed his preference for Bessent to assume the role, although the Treasury chief has repeatedly indicated he has no interest.
Other contenders have included current Governors Christopher Waller and Michelle Bowman, along with Rick Rieder, who manages the fixed income division at the money management giant BlackRock. They were the final candidates in a group of 11 evaluated for the position.
Powell’s term will expire in May, having been reappointed to the role by former President Joe Biden.
When asked at his Wednesday press conference about his legacy, Powell stated, “I genuinely want to hand this role over to my successor … with the economy in very good condition. That is my aspiration.”
