Kevin Warsh has recently gained momentum in the race to become the next chair of the Federal Reserve. According to prediction markets on Kalshi, Warsh is now viewed as the narrow favorite, with a 46% chance of nomination.
This is a significant change, as just last week, Warsh's odds were only 10%.
In contrast, Kevin Hassett's chances have dropped to approximately 39%. Just a week ago, Hassett enjoyed a strong position with odds as high as 77%.
This sudden decline reflects growing uncertainty surrounding his candidacy.
High-level advisers close to President Trump have voiced concerns about Hassett's closeness to the former president.
They fear that this relationship could undermine the Federal Reserve's institutional standing. These concerns have contributed to the shift in nomination odds, as advisers question whether Hassett is the right choice for the role.
The market dynamics changed after Trump made comments to the Wall Street Journal on December 15, 2025. Previously, he had indicated he knew who he would choose for Fed chair.
However, he later mentioned that Warsh had risen to the top tier of contenders. This statement has likely influenced traders' perceptions and contributed to Warsh's surge in odds.
Earlier in December, interviews with prospective candidates for the Fed chair position were abruptly canceled, creating uncertainty in the selection process.
But, Warsh's interviews were rescheduled and successfully held last week, further solidifying his position in the race.
As the situation continues to evolve, all eyes will be on how President Trump ultimately decides. The shifts in prediction markets indicate that Warsh is now a strong contender for the role, but the outcome remains uncertain.
