Trump shakes up the race for Federal Chairman: Who will replace Powell?
President Donald Trump has publicly expressed his hesitation about moving Kevin Hassett to the Federal Reserve, casting doubt on Hassett's chances of succeeding Jerome Powell as Fed chairman.
Speaking at a conference, Trump said he wanted to keep Hassett in his current role, citing concerns about losing a trusted adviser if he were sent to the feds.
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Kevin Hassett's luck is awesome.
That comment immediately changed expectations surrounding the next chairman of the federation. With Hassett's fortunes dwindling, attention has shifted to Kevin Warsh, now seen by the markets and Washington insiders as a leading contender.
Hassett has been widely discussed as Powell's primary replacement ahead of the May 2026 transfer.
Trump's comments, however, suggest a preference for continuity in the White House rather than a move to the central bank.
As a result, the discussion of prediction markets and analysts has shifted away from Hassett in recent days.
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Kevin Warsh moved to the front
Kevin Warsh brings central banking experience, having served as a Fed governor during the global financial crisis. His profile has long appealed to Republicans who want credibility with markets and a clear separation between monetary policy and day-to-day politics.
Trump's reluctance to part with Hassett has put Warren at the top of the list of potential candidates.
Crypto Lens: Warsh vs. Powell
On crypto, Warsh and Powell differ on tone rather than results. Powell has maintained a cautious institution-first approach, repeatedly touting financial stability, consumer protection and clear regulatory lines for stablecoins and exchanges.
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It avoids supporting crypto as money by allowing markets to develop under existing regulations.
Warsh's record points to practical skepticism. He acknowledges Bitcoin's potential as a store of value, often comparing it to gold, but is wary of private cryptocurrencies acting as everyday money.
That position does not indicate direct hostility, but strict defensive measures. Compared to Powell, Warsh may seem more open to debate on digital assets, but his policy outcomes remain conservative.
Powell's watch is ticking.
Powell's term as Fed chairman ends on May 15, 2026. He can remain on the board of governors until 2028, though chairs rarely do after they step down.
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With inflation easing but not completely subdued, markets will expect some room for major policy shifts before going away.
Traders will be adding one more price under Powell ahead of the transition, hoping the data will cooperate.
Any major pivot now appears unlikely, reinforcing the sense that the next chair will define policy direction for 2026 and beyond.
Meanwhile, Powell faces an unusual political backdrop. A Justice Department investigation tied to congressional testimony on federal headquarters renovation costs included a subpoena.
Powell said the issue would not affect monetary policy. However, as a change in leadership approaches, the investigation has fueled debate over central bank independence.
