The Trump-Powell feud keeps heating up. Meet the betting markets' top picks to replace the Fed chief.
- - - The Trump-Powell feud keeps heating up. Meet the betting markets' top picks to replace the Fed chief.
Christine JiJuly 20, 2025 at 5:45 PM
U.S. President Donald Trump gestures with Jerome Powell, his nominee to become chairman of the U.S. Federal Reserve at the White House in WashingtonReuters -
The Trump-Powell feud escalated this week.
Polymarket shows a 70% odds Powell will be replaced, a development that would be a blow to Fed independence.
These are the top four frontrunners for Jerome Powell's job.
As President Donald Trump continues his crusade against Fed Chair Jerome Powell, investors are grabbing their popcorn and gambling on Powell's replacement like it's the Super Bowl.
The events of recent weeks have turned the normally boring topic of Federal Reserve leadership into something of a soap opera. Powell's in hot water for what administration officials say is mismanagement of the Fed's building renovation. Trump reportedly drew up, then withdrew, plans to fire Powell. Other Fed governors are piling on Powell for his hesitancy to cut interest rates.
Powell's firing would be a blow to Fed independence and seriously disturb markets, as investors would no longer view the central bank as an independent decision-making body, but an arm of the executive.
It's a trying time for Fed watchers, but bets are already being placed on who will step into Powell's shoes, whether Trump fires him or he survives until 2026.
Here's who's being scouted as the next Fed boss, along with the Polymarket odds of their appointment as of Friday, July 18.
Scott Bessent
Treasury Secretary Scott Bessent told Bloomberg he believes there are "gigantic savings" to be made for Americans.AP Photo/Evan Vucci
Who is he: Treasury Secretary
Polymarket odds: 23%
Market commentary: Bessent is the top pick to replace Powell, but he's in a tricky position as Trump's right-hand man for all things markets. Trump himself has flagged Bessent as a potential candidate for Fed chair, but the president said on Tuesday that he likes Bessent where he is now.
When Bessent first assumed the role of Treasury Secretary, Wall Street believed he would promote policies that appeased markets. However, he's often come out on Trump's side when stocks have crumbled, stating that he and the president aren't concerned about a little volatility.
Nobel Laureate Paul Krugman wasn't particularly bullish on Bessent in a recent Substack post.
"What Trump looks for in his personnel choices is, above all, groveling loyalty. So anyone he chooses will, more or less by definition, be a spineless toady. Even if the appointee looks qualified for the position, we can be sure that he or she will indulge and cheer on every Trump idea, no matter how bad," Krugman wrote.
"I call this Bessent's Law because when Trump chose Scott Bessent as Treasury Secretary a number of Wall Street people assured us that he was a good, competent choice."
Key quote: Bessent's been tight-lipped about any Powell replacement details. "There's a formal process that's already starting. There are a lot of great candidates and we'll see how rapidly it progresses," Bessent told Bloomberg on Tuesday.
Kevin Warsh
FILE PHOTO - Kevin Warsh, addresses the Shadow Open Market Committee during a symposium in New YorkThomson Reuters
Who is he: Former Federal Reserve Governor
Polymarket odds: 20%
Market commentary: Warsh is seriously pulling out all the stops for the chance to take Powell's job. In a twist, he was passed over for Fed Chair in 2017, when Trump picked Powell to replace Janet Yellen.
Earlier in July, Warsh appeared on Fox Business, where he pushed for lower interest rates and argued that "tariffs are not inflationary."
His current stance is an interesting reversal from his time as a hawkish Federal Reserve Governor from 2006 to 2011, when he expressed concern that aggressive rate cuts could lead to higher inflation.
Neil Dutta, head of economics at Renaissance Macro, said he thinks Warsh is one of the worst picks for Fed Chair.
Key quote: "I don't think we need continuity when the central bank doesn't have credibility," Warsh said on CNBC on Thursday, criticizing Powell's decision to make a jumbo 50 basis point rate cut last September. "We need regime change at the Fed."
Kevin Hasset
White House Council of Economic Advisers Chairman Kevin HassettChip Somodevilla/Getty Images
Who is he: National Economic Council Director
Polymarket odds: 16%
Market commentary: There's another Kevin in the running. As Trump's current economic advisor, Wall Street strategists think Hasset is likely to follow Trump's orders.
When asked about Hasset during a press briefing, Trump said "Kevin is fantastic."
Hasset has been critical of the Federal Reserve's renovation project budget and has voiced support toward the idea of firing Powell. But similar to Bessent, Hasset hasn't commented much on whether Trump has asked him to be the next Fed chair. However, he has backed Trump's call to cut interest rates by up to three points.
"Kevin Hassett and Scott Bessent are blatant political picks, which may struggle to achieve Senate confirmation," Michael Brown, senior research strategist at Pepperstone Group, wrote in a note late last month.
Key quote: "The president has policy disagreements. He thinks that the Fed has been mismanaged. He's been discussing his own view about what policy should be, but he's not disrespecting the independence of the Fed," Hasset said on NBC News on July 16.
Christopher Waller
Federal Reserve Governor Christopher Waller was supposed to give his remarks, but the Zoom call was infiltrated by a participant displaying pornographic photos.Sarah Silbiger/Getty Images
Who is he: Federal Reserve Governor
Polymarket odds: 12%
Market commentary: Waller is gaining momentum in the race as a dark horse candidate, receiving a 9% boost on Polymarket early Friday after giving a speech arguing for a July rate cut. Waller cited weak private payroll growth as one of the main reasons for the Fed to lower rates at this month's meeting.
Out of all the options, Waller would probably be the one most palatable to investors, as his arguments for cutting are the least political, and he would represent a fairly establishment pick to run the central bank.
"He is not talking about cost overruns on the Eccles building or lowering the cost of government finance or 'regime change,' but he is talking about the shifting balance of risks in the economy," Dutta wrote in a note on Thursday.
"There is a huge distance from him — someone who has an intellectual consistent/defensible/sound position — and the sycophants (Hassett, Bowman, Warsh) who are extensions of DJT," Warren Pies, founder of 3Fourteen Research, wrote in an X post on Thursday.
Key quote: "While the labor market looks fine on the surface, once we account for expected data revisions, private-sector payroll growth is near stall speed, and other data suggest that the downside risks to the labor market have increased. With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate," Waller said on Thursday.
on Business Insider
Source: “AOL Money”
