The race to become the next Federal Reserve Chair just turned into a political drama that would make reality TV producers jealous.
With Jerome Powell's term expiring in May 2026, President Trump has narrowed his shortlist to four candidates. And prediction markets are already placing their bets.
Here's everything you need to know.
The Front Runners
According to Treasury Secretary Scott Bessent, Trump is down to four finalists. But the real battle is between what insiders are calling "The Two Kevins."
Kevin Hassett currently leads the pack. As Director of the National Economic Council and a longtime Trump adviser, Hassett enjoys a 58% probability on prediction market Kalshi. He's been vocal about his belief that the Fed needs to cut rates aggressively, arguing that the AI boom will boost productivity and naturally push inflation down.
"If you look at central banks around the world, the U.S. is way behind the curve in terms of lowering rates," Hassett recently told CNBC.
That message aligns perfectly with what Trump wants to hear.
Kevin Warsh sits in distant second with about 25% odds. A former Fed governor who managed the 2008 financial crisis, Warsh is viewed as the "independence candidate." He's hawkish on inflation, skeptical of political pressure, and has publicly criticized the Fed's drift into areas like climate change.
Wall Street loves Warsh. Trump? Less clear.
The Plot Twist
The search process has been completely upended by a Department of Justice investigation into Powell over renovations at the Fed's headquarters. Powell has publicly called the investigation a "pretext" for political intimidation.
Senator Thom Tillis of North Carolina has already signaled he would oppose any nominee until the DOJ investigation is fully resolved. This could block Trump's pick from even reaching a floor vote.
And the Supreme Court is about to hear arguments on Trump's attempt to fire Fed Governor Lisa Cook, adding another layer of uncertainty to the entire process.
The Wild Card: Chris Waller
Current Fed Governor Christopher Waller also interviewed for the position last week. Unlike Hassett or Warsh, Waller is already inside the Fed system and has supported recent rate cuts.
Some analysts believe Trump met with Waller just to have a backup plan if his preferred candidates face confirmation issues.
What Trump Wants
Trump has made his position clear: Anyone who disagrees with cutting rates during good economic times "will never be the Fed Chairman."
That's a direct quote from Truth Social.
He's also called Powell a "fool" and a "stubborn ox," criticized the Fed's renovation costs, and threatened lawsuits. The message to candidates is simple: play ball or stay home.
The Timeline
Trump originally said he'd announce his pick in early January 2026. Some speculation suggests he could make the announcement at Davos this week to maximize attention.
Whoever wins will take over a deeply divided Fed. The central bank has cut rates by 75 basis points this year (after 100 last year), bringing the federal funds range to 3.50% to 3.75%. But internal disagreements about the pace and scope of cuts continue.
The Bottom Line for Crypto
Here's why this matters for your portfolio:
A dovish Fed Chair who aggressively cuts rates could be rocket fuel for risk assets, including crypto. Lower rates mean cheaper money, which typically flows into speculative investments.
On the flip side, if Trump's pick faces confirmation battles and the Fed leadership remains uncertain for months, expect continued volatility across all markets.
The next few weeks will determine who holds the most powerful financial position in the world.
Are you positioned accordingly?