The betting market is almost certain the next Fed Chairman will be named Kevin, it’s just not sure which one. Kevin Hassett and Kevin Warsh appear to be the finalists based on Trump’s comments.
There has been a push for current Fed Governor Chris Waller but that doesn’t appear to gaining traction. Yesterday, the odds for Warsh briefly spiked but they’ve retreated just as quickly. Today, Hasset is back in the lead at PredictIt at 57-36%.
In terms of markets, I don’t think it’s a big difference. I’d classify them both as Trump lackeys who will do whatever he demands. The good news for markets is that with oil prices at a four-year low, there is plenty of disinflation in the pipeline and that will clear the way for some easing. The risk is that if oil prices rise (as they inevitably will), then keeping rates too low risks fuelling a fresh round of inflation.
