Fed Chair Race Tightens as Hassett’s Odds Slip Below 50% Ahead of Trump’s Decision

Prediction markets shows that the odds of Kevin Hassett becoming the next Fed Chair is less than 50%. This drop shows enhanced competition and doubts of Hassett being nominated finally. Meanwhile, investors are hoping the Fed would maintain rates at its next meeting as speculation on future policy is mounting.

Is Fed Chair Race Becoming Tighter?

The latest Polymarket chart shows changes in expectations as President Trump is about to nominate the next Fed Chair. The contest is tighter, as traders and analysts are taking a more watchful eye towards Kevin Warsh, Christopher Waller and Rick Rieder as well.

Once a leader in the odds, Hassett’s chance is showing signs of an increase in skepticism. While speaking in an interview, Kevin Hassett mentioned that he is prepared to accept the Fed chair position.

His chances rose at the beginning of December after which the other candidates caught up with him. Warsh has drawn greater attention lately, as Waller remains a stable, plausible choice. Although Rieder has the minimal chance, his name still warrants attention.

Can Trump Influence the Next Fed Chair Choice?

Debates over interest rates and economic policies are being closely followed by investors. The perspective of Trump regarding monetary policy were recently discussed by Anthony Scaramucci and Mike Novogratz.

They emphasized that Trump might affect the decision of the new Fed chair due to his economic objectives to have certain impact on the broader financial system. According to Scaramucci, Trump would prefer considerably lower rates, possibly as low as 1% when interviewing the candidates.

Fed official Stephen Miran also supported further rate cuts, citing that it would assist the U.S. to escape recession. He and Novogratz said this creates expectations that the next Fed chair may lean more dovish. According to them, this increases market’s focus on rate-cut risks and inflation pressures.

The discussion also highlighted how unusually political the selection process has become under Trump compared with earlier administrations. This adds greater sensitivity to every shift in nomination speculation.

Will Fed to Reduce Rates in January?

Prediction market data shows a fall in Fed rate cut odds in January despite rising political pressure. Only 14% of traders indicate that the Fed will lower rates.

The chart also shows that the Fed is unlikely to raise or lower rates by 25-basis points. However, it is most probable that the Fed will leave the rates unchanged during the next meeting.

It has almost 1% chances of an increased 50-basis point in rate cut and the possibility of an increase in rates is insignificant. The huge debate about the Fed chair position creates an idea of a stronger policy adjustment in the second half of next year.