Meet the Two Kevins Leading the Race for the Next Fed Chair in 2026

The battle to decide who will control America's money supply has whittled down to a tale of two Kevins. Kevin Warsh, a former Federal Reserve governor with deep ties to Wall Street, and Kevin Hassett, the current director of the National Economic Council and a staunch Trump loyalist, are the clear frontrunners to replace Jerome Powell when his term ends in May 2026. While both are conservative economists, they offer President Trump drastically different paths: Warsh represents the traditional, independent “guardian of the currency,” while Hassett largely represents a vision of a Fed more aligned with the White House's political goals.

Meet the Two Kevins Leading the Race for the Next Fed Chair

It feels like every time I turn on the financial news, the speculation has reached a fever pitch. And for good reason—Meet the Two Kevins Leading the Race for the Next Fed Chair isn't just a catchy headline; it is the single most important decision for the global economy in the coming year.

The Current State of Play: A Sudden Shift

If you had asked me a few months ago, I would have bet on the loyalist. But money talks, and right now, the smart money is moving.

We have seen a fascinating reversal in the prediction markets. According to data tracked by Kalshi throughout December 2025, the momentum has swung violently. Just look at the numbers:

Source: Kalshi prediction markets.

Why the sudden change? From what I gather, it comes down to a fear that Hassett might be “too close to Trump.” A recent CNBC report highlighted pushback from influential figures around the President who worry that appointing a pure loyalist might spook the markets. When investors get scared that a Fed Chair will print money just to help a President generally, they sell bonds, and interest rates spike. That is the exact opposite of what Trump wants.

Kevin Warsh: The Wall Street “Adult in the Room”

Let’s dig into the first contender. Kevin Warsh, 55, is what I would call the “safe pair of hands” for the banking sector. He isn't just an academic; he is a guy who has been in the trenches.

Warsh has a resume that screams establishment. He spent seven years at Morgan Stanley working in mergers and acquisitions. He speaks the language of the trading floor. But his real claim to fame came when President George W. Bush nominated him to the Fed Board of Governors at age 35. That is incredibly young for central banking.

In my opinion, Warsh’s strongest selling point is his track record during the 2008 financial crisis. He was the primary liaison between the Fed and Wall Street. Imagine being the guy on the phone with terrified CEOs while the global economy is melting down. He worked side-by-side with Ben Bernanke and Timothy Geithner to keep the system from collapsing.

However, Warsh isn't a rubber stamp for easy money. In fact, he famously resigned from the Fed in 2011, well before his term was up. Why? Because he was critical of Quantitative Easing (QE)—the Fed's policy of buying massive amounts of bonds. He worried it would cause inflation. Given that we have just lived through a massive inflationary period, Warsh looks pretty prescient right now.

• Key Advantage: Trusted by Wall Street; proven crisis manager.
• Key Risk: Theoretically hawkish (might hesitate to cut rates if inflation risks remain).

Kevin Hassett: The Loyal Political Economist

On the other side of the ring is Kevin Hassett, 62. If Warsh is the banker, Hassett is the academic warrior.

Hassett has a PhD from Penn and has been a fixture in Republican politics for decades, advising everyone from McCain to Romney. During Trump's first term, he chaired the Council of Economic Advisers and was a massive force behind the 2017 corporate tax cuts. Currently, he is serving as the director of the National Economic Council, making him Trump's right-hand man on the economy.

But there is a bit of history here that I find impossible to ignore. In 1999, Hassett co-authored a book called Dow 36,000. He predicted the stock market would hit 36,000 by 2005. Spoiler alert: It didn't happen until November 2021. While economists get things wrong all the time, that book has followed him around like a shadow.

The worry with Hassett isn't his intellect; it's his independence. In August 2025, he defended Trump's controversial firing of the head of the Bureau of Labor Statistics. To me, that is a red flag. The Fed relies on data. If the person leading the Fed is seen as manipulating or ignoring data to please the President, the credibility of the US Dollar takes a hit.

• Key Advantage: aligned with Trump’s pro-growth tax vision; deep White House experience.
• Key Risk: Perceived lack of independence; potentially erratic monetary policy.

The Independence Factor: Why It Matters to You

You might be wondering, “Why should I care which Kevin gets the job?”

Here is the bottom line: Inflation vs. Jobs.

The Federal Reserve is supposed to be independent. They are like the referee in a football game. If the referee starts betting on one team (the President's political party), the game is rigged.

Jamie Dimon, the CEO of JPMorgan Chase, has reportedly signaled support for Warsh. Dimon knows that if Hassett gets in and cuts interest rates too aggressively just to boost the economy before an election, inflation could roar back. High inflation eats into your paycheck.

Hassett has gone on TV (CBS's Face the Nation) to do some damage control. He stated that Trump’s voice would carry “no weight” on Fed decisions unless it was based on data. But actions speak louder than words. Major bond investors have already complained to the Treasury Department. They are terrified that Hassett equates to political loyalty over economic stability.

My Take: The Market Is Voting for Warsh

Looking at the landscape (oops, I promised not to use that word!), looking at the current situation, I believe the shift toward Kevin Warsh tells us what we need to know.

President Trump loves loyalty, but he loves a booming stock market more. If the bond market revolts because they fear Hassett is a puppet, interest rates on mortgages and credit cards will skyrocket, crushing the economy. Trump is a businessman; he knows that Kevin Warsh offers the credibility that keeps investors calm.

Trump has personally met with Warsh and asked him if he can be trusted to back rate cuts. This suggests Trump is looking for a middle ground: someone the markets trust, but someone who isn't opposed to growth.

What Hangs in the Balance?

We are likely to get an announcement in early 2026. Treasury Secretary Scott Bessent is running the selection process right now. While there are other names on the list—like Fed Governors Christopher Waller and Michelle Bowman, or BlackRock’s Rick Rieder—it is clearly a race between the two Kevins.

This choice represents a fork in the road for the American economy:

1. The Warsh Path: A return to orthodox, Wall Street-friendly central banking with a focus on fighting inflation.
2. The Hassett Path: An experimental fusion of fiscal and monetary policy where the line between the White House and the Fed blurs.

As we wait for May 2026, keep an eye on the 10-year Treasury yield. If it spikes, the market is nervous about Hassett. If it stabilizes, they are pricing in Warsh.

In the end, as the two Kevins lead the race for the next Fed Chair, we aren't just looking at resumes. We are looking at the future value of the money in our pockets.