Trump's single statement "locks in" the nominee for Federal Reserve Chair, making Kevin Warsh's chances of being nominated far ahead of the rest.

On January 17th, when discussing White House National Economic Council Director Kevin Hassett, Trump stated, "I want him to stay in his current position. We'll see." This statement suggests that Trump may have someone else in mind for the Federal Reserve Chair nomination, and market expectations for the Fed Chair have shifted from a two-way race between Kevin Hassett and Kevin Warsh to Warsh leading alone. It's worth noting that Hassett himself commented on this before Trump's remarks, saying, "Wash and Rieder would also be great Fed Chairs." Perhaps Hassett already knew Trump's final choice.

According to data from the prediction market Polymarket, Hassett's probability of being nominated for the chairmanship has dropped to 15%, comparable to that of Federal Reserve Governor Waller, while Kevin Warsh's probability of being nominated has risen to over 60%, making him the frontrunner for the nomination and leaving other candidates far behind.

Compared to Trump's close ally and "absolutely dove" Hassett, Kevin Warsh holds a more hawkish stance, but the market expects Warsh to still support interest rate cuts while pushing forward with balance sheet reduction (QT). Earlier this year, Warsh proposed the view that "inflation is an option," arguing that inflation is not caused by supply chains or geopolitics, but rather stems from the Federal Reserve's own policy decisions. Warsh is extremely optimistic about the US economic outlook, believing that AI and deregulation will bring about a productivity explosion similar to that of the 1980s.