There are currently three main candidates for the next Federal Reserve Chair in the eyes of prediction markets. These are Kevin Warsh, Kevin Hassett and Christopher Waller.
Trump Comments
President Trump said on August 5, “both Kevins are very good, and there are other people that are very good too,” in an interview with CNBC. However, unlike the other two leading candidates, Christopher Waller is currently on the Federal Open Market Committee and is aggressively advocating for lower interest rates, something Trump wants to see. Waller’s comments in July about a weakening job market also proved prescient, which may help his case. Given the soft jobs data disclosed in August, it’s likely that the FOMC will cut rates in September according to fixed income markets.
Leading Candidates
Kevin Warsh served on the Federal Reserve Board from 2006 to 2011, so has prior experience, including holding a role at the Fed during the financial crisis. Kevin Hassett has no prior role at the Fed, but has served in a number of economic advisory roles, and is director of the National Economic Council.
Other Possibilities
In addition to Waller, Michelle Bowman dissented at the July meeting, calling for lower rates and released a statement explaining that she thought tariffs would only see one-time inflation and that the labor market may be increasingly fragile. However, despite a similar policy position to Waller, Bowman is not currently viewed as a main contender for the upcoming Chair position according to prediction markets.
In addition, Trump has nominated Stephen Miran, current Chair of the Council of Economic Advisors to fill Adriana Kugler’s seat after her early resignation. That appointment could have been a step to appointing the next Chair, but it appears Miran’s role may only be relatively temporary and he may be replaced by Trump’s choice for Fed Chair once the remainder of what was Kugler’s term expires in January 2026.
Announcement Timings
Donald Trump is set to nominate the next Fed Chair for May 2026 when Jerome Powell’s term ends. The Senate would also have to approve any candidate. That has been speculation that Trump might try to fire Powell before then, but chances of that appear to have diminished, in part because Trump has no clear legal power to do so. It is also typical for the Fed Chair to leave the FOMC after stepping down, but it is unclear from his recent comments if Powell plans to do so.
Currently prediction markets such as Polymarket and Kalshi view Waller as the leading candidate for the next Fed Chair. However, all three candidates have been favorites at different points since July.
That said, even though the Chair may change, the other members of the FOMC are likely to remain broadly unchanged, so even though a new Chair may be appointed by Trump to drive rates lower, it’s unclear that monetary policy will shift materially under a new Fed Chair if other voting policymakers remain in place. In fact, depending on economic conditions, there may be several interest rate cuts before the new Chair is appointed.