Warsh sprints ahead in Fed chair race following Trump comments on Hassett, prediction markets show

Former Federal Reserve Governor Kevin Warsh emerged as the front-runner in the race for central bank governor following President Donald Trump’s comments on Friday, according to a closely followed prediction market.

Traders on Kalshi have pushed Warsh well ahead of National Economic Council Director Kevin Hassett, who is seen as his closest rival.

In a statement Friday morning, Trump said he would prefer to keep Hassett in his role as chief economic adviser, without making his decision clear.

“I see Kevin in the audience and I want to thank you. You were great on TV today,” Trump said in his speech at the White House. “If you want to know the truth, I actually want to keep you where you are.”

After Trump spoke, traders at Kalshi increased Warsh’s odds of getting the job to 59%, compared to just 14% for Hassett. Even current Fed Chairman Christopher Waller was considered a long shot for the position, putting him ahead of Hassett with an 18% chance.

As recently as Wednesday, Warsh and Hassett were at a near deadlock.

Traders at Polymarket expressed a similar dynamic; Warsh led Hassett with 58% to 11% and Waller with 16%. Investors gave BlackRock fixed income chief Rick Rieder and Fed Governor Michelle Bowman little chance, while two other candidates were considered finalists.

Trump stated that he would name Powell’s successor this month, but did not give an exact date. Powell’s term as president ends in May.

Turning to White House Chief of Staff Susie Wiles, Trump said, “We don’t want him to lose.” [Hassett]Susie, but we’ll see how it all turns out.”

Disclosure: CNBC and Kalshi have a business relationship.