Fed Chair Race Heats Up as Trump Comments Stir Debate

As the race to appoint the next US Fed chair narrows, concerns about political influence over monetary policy have moved back into focus. Kevin Hassett, one of the leading candidates to replace the current Fed chair, dismissed claims that President Donald Trump could steer decisions at the central bank.

An announcement on the next Fed chair is expected in mid January. Some market participants worry Trump may attempt to extend his reach across the Federal Open Market Committee by reshaping its leadership. 

Hassett addressed those fears during an interview with CBS News’ Face the Nation, stressing that the Fed’s structure is designed to protect independent decision making.

According to Hassett, the 12 voting members of the Federal Open Market Committee determine policy outcomes. He said a president’s view might enter discussion only if it is supported by data and accepted by the committee. If members disagree, he noted, they are free to vote another way.

Top Fed Chair Contenders

On Friday, Trump confirmed that two candidates are leading the contest, former Fed governor Kevin Warsh and Hassett. Speaking to The Wall Street Journal, Trump said Warsh currently sits at the top of his list, while praising both finalists.

Prediction markets reacted quickly. Earlier this month, platforms such as Kalshi and Polymarket placed Hassett’s chances at around 85%. After Trump’s comments, those odds fell sharply. At the time of writing, Hassett leads on Kalshi with about 50%, while Warsh follows closely at 39%.

During the same interview, Trump also said future Fed leadership should consult with him on interest rate policy. While he acknowledged that the chair should not simply follow White House views, Trump argued that his opinion should be considered.

Markets Watch Rates and Crypto Reaction

Last Wednesday, the Federal Reserve lowered interest rates by 25 basis points, bringing the target range to 3.5% to 3.75%. Despite the move, crypto markets showed little reaction, with prices largely flat across major assets.

Current Fed chair Jerome Powell pointed to ongoing inflation risks along with weakening employment conditions. He said policymakers face a difficult balance and no easy policy path.

Trump has made clear he favors deeper rate cuts in 2026, a stance that could influence market expectations. He said Warsh supports lowering rates, adding that many advisers share that view.