Personnel expectations around the Federal Reserve System changed after a public appearance by Donald Trump. The president made it clear that he is not considering moving Kevin Hassett to the Fed as a priority, thereby cooling talk of his possible appointment as chair of the regulator instead of Jerome Powell.
Trump linked his attitude toward this scenario not to the position of the Fed, but to internal work at the White House. According to him, Hassett remains an important part of the current team and plays the role of an advisor he relies on in everyday decisions. Losing this resource for a move to the central bank, as his comments suggest, seems unjustified to him.
Kevin Hassett’s Odds Are Falling
After these remarks, market expectations regarding a successor began to shift. Until recently, Hassett was among the main candidates to replace Powell due to the transition in May 2026. Now, Kevin Warsh is increasingly discussed as the more likely scenario. His name is mentioned both in market assessments and in Washington circles, where signals from the White House are closely watched.
The meaning of Trump’s comment is clear. He is not showing interest in reshuffles that would weaken his team, even if it concerns a position as significant as Fed chair. Therefore, in recent days, discussion of Hassett’s candidacy has noticeably shifted toward other figures.
Kevin Warsh’s odds are rising on prediction markets. Source: Polymarket
Kevin Warsh Comes to the Fore
Kevin Warsh has experience working at the central bank. He previously served on the Fed Board of Governors during the global financial crisis. His profile has long attracted Republicans, who value a combination of market trust and a clearer separation between monetary policy and day-to-day politics.
Trump’s reluctance to part with Kevin Hassett has significantly boosted Warsh’s status and put him among the key contenders for Fed chair.
Warsh Versus Powell
In the cryptocurrency agenda, Kevin Warsh and Jerome Powell differ mainly in their approach to language, not in their ultimate regulatory goals. Powell consistently builds his position around institutional priorities. His public statements emphasize financial stability, consumer protection, and the need for clearly defined rules for stablecoins and crypto exchanges. At the same time, he avoids treating cryptocurrencies as a form of money, preferring to view them as a market developing within existing regulation.
Warsh’s position is more pragmatic, but not softer. He has allowed that bitcoin can serve as a store of value and compared it to gold. At the same time, he has consistently expressed doubts that private cryptocurrencies can serve as everyday payment methods without risks to the monetary system.
See Also: Bitcoin Hashrate Continues to Fall Despite Sharp Price Surge
In practical terms, this means a limited difference in outcomes. Even with Warsh’s more open rhetoric, the Fed‘s regulatory stance would likely remain cautious, focusing on control, separation of functions, and maintaining strict boundaries for the use of digital assets.
Powell’s Term Is Ending
The term of Jerome Powell as Fed chair expires on May 15, 2026. Formally, he can remain on the Board of Governors until 2028, though in practice former chairs rarely continue on the board after leaving the post.
Amid slowing inflation, which is still not considered fully defeated, markets do not expect room for sharp policy changes before his mandate ends.
Traders are increasingly pricing in one more rate cut under Powell before the transfer of power, provided macro data supports it.
Markets largely anticipate rates to remain unchanged until April 2026. Source: CME FedWatch
A major policy reversal at this stage looks unlikely. This reinforces the sense that the next Fed chair will set the direction of monetary policy in 2026 and beyond.
At the same time, Powell is working in an unusual political environment. The US Department of Justice is conducting a review related to his congressional testimony about cost overruns in the reconstruction of the Fed headquarters. Documents have been requested as part of the investigation.
Powell has stated that this situation does not affect monetary policy. Nevertheless, the investigation has intensified the debate about the central bank’s independence as the leadership change approaches.
