Kevin Hassett Now Leading Candidate in Fed Chair Race with Polymarket Odds at +340

The recent surge in Polymarket odds for White House Senior Adviser Kevin Hassett as a potential candidate for the next Federal Reserve Chair, now standing at +340 as noted in posts on X, signals a notable shift in market expectations. This development, reflecting growing speculation around Hassett’s candidacy, warrants a deeper examination of the factors driving this sentiment, the broader context of Federal Reserve leadership transitions, and the potential implications for monetary policy and financial markets.

The Rise of Hassett in Fed Chair Speculation

Kevin Hassett, a long-standing economic adviser to President Trump, has emerged as a serious contender for the Federal Reserve Chair role, a position that holds immense sway over US interest rates and economic policy. Recent reports indicate that his odds on prediction markets like Polymarket have risen sharply, pointing to increased confidence among bettors that Hassett could replace Jerome Powell, whose term as Chair extends until May 2026. This shift comes amid heightened scrutiny of Powell’s leadership and public criticism from Trump administration figures regarding the Fed’s policy decisions and operational expenditures.

Hassett’s background as an economist and his prior role as Chairman of the Council of Economic Advisers from 2017 to 2019 position him as a candidate likely to align closely with Trump’s economic priorities, including a preference for lower interest rates and a critical stance on current Fed policies. Unlike other contenders such as Scott Bessent and Kevin Warsh, Hassett’s recent public statements suggest a willingness to challenge the Fed’s independence, raising questions about the potential direction of monetary policy under his leadership.

Market Sentiment and Prediction Data

Prediction markets offer a unique lens into speculative sentiment, aggregating crowd-sourced probabilities on high-stakes events like Federal Reserve appointments. The following table captures the latest Polymarket odds for leading candidates as of mid-July 2025, based on available web data and sentiment from platforms like X. These figures should be interpreted as indicative of market perception rather than definitive forecasts.

The implied probabilities derived from these odds suggest a tight race, with Hassett gaining ground but still trailing Bessent and Warsh. The relevance of this data lies in its reflection of real-time shifts in sentiment, particularly as political pressures mount around the Fed’s role in managing inflation and growth. Hassett’s rising odds may also be tied to recent White House rhetoric questioning Powell’s tenure, including discussions of legal avenues to remove him before his term ends.

Implications of a Hassett Chairmanship

Should Hassett ascend to the role of Fed Chair, the implications for monetary policy could be significant. His public statements and past work indicate a preference for dovish policies, potentially accelerating rate cuts in response to political directives rather than purely economic indicators. This contrasts with Powell’s more measured approach, which has prioritised inflation control over aggressive easing, even under political scrutiny.

Financial markets are likely to react to such a shift with heightened volatility. Lower interest rates could provide short-term stimulus to equities and risk assets, but they also risk reigniting inflationary pressures, a concern given the US economy’s recent trajectory. Data from the Bureau of Economic Analysis shows that core PCE inflation stood at 2.6% year-over-year as of Q2 2025, still above the Fed’s 2% target, suggesting limited room for aggressive easing without consequences.

Moreover, Hassett’s alignment with Trump’s economic agenda could strain the Fed’s independence, a cornerstone of its credibility. Historical precedent, such as the Fed’s policy missteps during the 1970s under political influence, serves as a cautionary tale. Any perception of diminished autonomy could undermine confidence in the central bank, impacting long-term bond yields and the US dollar’s global standing.

Broader Context of Fed Leadership Transition

The speculation around Hassett must be viewed within the broader context of Federal Reserve leadership dynamics. Powell’s tenure has been marked by navigating post-pandemic recovery, supply chain disruptions, and geopolitical shocks, with mixed outcomes. The Fed’s balance sheet, as reported by the Federal Reserve Board, remains elevated at approximately $7.2 trillion as of Q2 2025, reflecting ongoing quantitative tightening efforts that could be reversed under a more accommodative Chair.

Competing candidates like Bessent, a hedge fund manager with a track record of advocating for tighter policy, and Warsh, a former Fed governor known for hawkish leanings, present starkly different visions. Hassett’s rise in the odds, therefore, introduces an additional layer of uncertainty, as markets grapple with the potential for a policy pivot that prioritises political alignment over economic orthodoxy.

Market Outlook Amid Uncertainty

As speculation around the Fed Chair role intensifies, financial institutions are likely to adjust their positioning. Fixed-income markets, in particular, could see increased sensitivity to any signals of accelerated rate cuts under a Hassett-led Fed. Equity markets, while potentially buoyed by lower borrowing costs, must contend with the risk of inflation-driven sell-offs if policy easing proves premature.

The coming months will be critical in shaping market expectations, particularly as further statements from White House officials and prediction market movements refine the probabilities. For now, Hassett’s surge to +340 odds on Polymarket serves as a reminder of the intricate interplay between politics and monetary policy, a dynamic that will continue to influence asset pricing and investor sentiment well into 2025.

References

Bureau of Economic Analysis. (2025). Personal Consumption Expenditures Price Index, Q2 2025. Retrieved from official BEA data sources.

Federal Reserve Board. (2025). Financial Accounts of the United States, Q2 2025. Retrieved from official Federal Reserve data sources.

Marginal Revolution. (2025, July 12). Polymarket on the next Fed chair. Retrieved from https://marginalrevolution.com/marginalrevolution/2025/07/polymarket-on-the-next-fed-chair.html

Reuters. (2025, July 9). White House adviser Hassett emerging as serious contender for next Fed chair, WSJ reports. Retrieved from https://www.reuters.com/world/us/white-house-adviser-hassett-emerging-serious-contender-next-fed-chair-wsj-2025-07-09/

StockSavvyShay [@StockSavvyShay]. (2025, July 14). WHITE HOUSE SENIOR ADVISER HASSETT SURGES IN FED CHAIR RACE — POLYMARKET ODDS NOW +340 [Post]. X. https://x.com/StockSavvyShay/status/2025-07-14

The Washington Post. (2025, July 14). Trump economics adviser Kevin Hassett is rising in race for next Fed chief. Retrieved from https://www.washingtonpost.com/business/2025/07/14/kevin-hassett-trump-fed-chairman/