"Kevin vs Kevin" Battle for Fed Chair Ignites as Trump's Succession Game Rattles Markets

TradingKey - According to renowned Wall Street Journal journalist Nick Timiraos, internal discussions within the Trump administration are focused on two frontrunners—Kevin Hassett, the Director of the National Economic Council, and Kevin Warsh, a former Federal Reserve governor — who are vying for the position of next Fed Chair.

The 63-year-old Hassett has been a long-time member of Trump's inner circle, with a background that includes service at the Federal Reserve in the 1990s and an executive role at Jared Kushner's private equity firm. Recently, he has changed his stance significantly, shifting from advocating for "respecting the independence of the Fed" to openly criticizing Powell for allegedly colluding with Democrats. He has repeatedly called for aggressive interest rate cuts to align with Trump's economic agenda.

His main advantage lies in his close relationship with Trump—the two have met several times to discuss nomination matters, and betting platform Polymarket shows that his odds of being chosen have risen to the top.

The 55-year-old Warsh has a more traditional background: he served as an economic advisor during George W. Bush's administration and was the youngest-ever Fed governor. Currently a professor at Stanford University, he has been known for his hawkish views but recently suggested that if the Fed reduces its balance sheet, it could support rate cuts, seeking a balance between adhering to Trump's wishes and maintaining policy independence.

Analysts note that Trump is intentionally transforming the nomination process into a political game. By allowing Hassett and Warsh to compete openly against each other, he strengthens his control over the Fed while also crafting an image of "decision-making transparency" in public discourse.