Summary (tl;dr)

President Donald Trump's recent comments have made Kevin Warsh the frontrunner for the next Federal Reserve Chair, while indicating a preference for Kevin Hassett to remain as the Director of the National Economic Council.

Essential Background

Kevin Warsh is a former member of the Federal Reserve Board of Governors, serving from 2006 to 2011, and previously advised President George W. Bush on economic policy. Kevin Hassett is an American economist who has served as the Director of the National Economic Council since early 2025 in the Trump administration, and previously chaired the Council of Economic Advisers from 2017 to 2019. Both are recognized figures in U.S. economic policy, often contributing to discussions on monetary policy, inflation, and economic growth. Current Federal Reserve Chair Jerome Powell's term is set to expire in May 2026, and he is reportedly under a criminal investigation by the Department of Justice, adding complexity to the succession process.

The Full Story

Speculation regarding the next Federal Reserve Chair intensified "today," January 16, 2026, following remarks from President Donald Trump. The President indicated a preference for Kevin Hassett to continue in his current role as Director of the National Economic Council, effectively signaling he would not nominate Hassett for the top Fed position. This statement caused a significant shift in prediction markets, boosting Kevin Warsh's odds to become the next Fed Chair to over 60%, while Hassett's chances reportedly dropped. The selection comes as the current Chair, Jerome Powell, faces a criminal investigation, further highlighting the importance of the upcoming nomination.

Why It Matters

The appointment of the Federal Reserve Chair is critical for U.S. and global economic stability, as the individual sets monetary policy that influences interest rates, inflation, and employment. Kevin Warsh is generally seen as having a more hawkish stance on monetary policy, emphasizing inflation risk and skepticism towards aggressive quantitative easing, while Kevin Hassett is viewed as more dovish, prioritizing growth and advocating for lower interest rates. Markets are reacting to Trump's signals, anticipating that Warsh, if nominated and confirmed, would support rate cuts while pursuing balance sheet reduction. The decision will have significant implications for financial markets, including currencies, gold, and equities, and will shape the Federal Reserve's approach to managing the economy amidst ongoing discussions about inflation, artificial intelligence's impact on productivity, and trade policy.

Geographic Location

• Washington, D.C., District of Columbia, United States (President Trump's remarks at a White House event regarding Fed Chair nomination)
• United States (focus of Federal Reserve policy and economic discussions involving Kevin Warsh and Kevin Hassett)