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Prediction-market platform Kalshi shows that the probability of Kevin Hassett being the first person formally nominated by President Donald Trump for Fed Chair before January 20, 2029 has surged to 48% up significantly from earlier in the year.
This sharp rise in implied odds reflects more than just betting behaviour: it signals how markets, political watchers and institutional participants view Trump’s preferences, Fed policy possibilities and the broader monetary-political landscape. Let’s unpack the key factors driving this change and what it could mean for the Fed and markets.
What the Odds Tell Us
Kalshi’s market structure allows participants to buy “Yes” or “No” contracts on specific political-economic events. If “Yes” contracts trade at $0.48, it implies a 48% consensus probability.
Here, “Yes” means Kevin Hassett will be the first person officially nominated by Trump as Fed Chair prior to January 20 2029. The fact that nearly half of the market estimates he will secure that nomination is notable for several reasons:
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It suggests increasing market confidence in his proximity to the President and alignment with Trump’s economic philosophy.
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It reflects skepticism about other potential candidates or delays in nomination.
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It provides a real-time read on how traders view political risk and Fed leadership.
Why Hassett’s Odds Have Risen
Several converging factors seem to have boosted his chances:
1. Alignment with Trump’s Agenda
Hassett, former Chair of the Council of Economic Advisers and Director of the National Economic Council, is seen as closely aligned with Trump’s economic priorities such as growth-oriented tax policy and lower interest rates.
2. Perception of Loyalty & Access
In Trump’s decision-making style, loyalty and past alignment have strong weight. Market participants appear to believe Hassett checks both boxes.
3. Fed Leadership Gap and Policy Shift Potential
With Jerome Powell’s term ending in May 2026, the next nomination presents a significant opportunity for Trump to reshape the Fed. Markets are positioning accordingly.
4. Prediction Market Momentum
As odds climb, more traders jump in, reinforcing the perception of probability. This feedback loop can push the implied percentage northwards.
Why It Matters For Markets & Monetary Policy
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Monetary-policy expectations: If Hassett becomes Fed Chair and aligns with Trump’s preferences, markets may anticipate accelerated rate cuts or looser policy.
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Risk-asset impact: A shift toward a more dovish Fed could buoy equities, weaken the dollar and boost inflation-sensitive assets.
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Strategy for investors: Watching these odds alongside economic data (inflation, employment), Fed minutes and White House commentary can offer a lead indicator for policy changes.
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Political risk awareness: The nomination process, Senate confirmation, and potential resistance all carry risks and markets price in perceived probabilities such as those shown on Kalshi.
What to Watch Going Forward
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White House signals: Any commentary from Trump or his advisers mentioning Hassett or highlighting key criteria will impact odds.
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Senate Dynamics: Confirmation votes matter. Even a nomination must clear Senate scrutiny.
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Policy-tilt indications: Early signs of a shift in Fed tone toward cuts or asset purchases may signal preparation for a new leader.
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Prediction-market movement: Changes in Kalshi’s odds over time can reflect evolving sentiment and new information.
FAQs
Q1: What does a 48% odds mean on Kalshi?
It means traders on Kalshi believe there’s approximately a 48% chance that Kevin Hassett will be the first person nominated by President Trump to be Fed Chair before January 20, 2029. It reflects market consensus, not a guarantee.
Q2: Why is Kevin Hassett the frontrunner?
Because of his previous roles (e.g., Director of the National Economic Council), his alignment with Trump’s economic agenda and perception of loyalty and access. Markets see him as strongly positioned.
Q3: Who else is in contention?
Other prominent names include Kevin Warsh, Christopher Waller, Michelle Bowman and Rick Rieder.
Q4: How reliable are these prediction-market odds?
They’re one indicator among many. While they reflect trader sentiment and information aggregation, they are not certainties and can shift quickly.
Q5: What does this mean for central-bank policy?
If Hassett were nominated and confirmed, markets may anticipate a shift toward looser monetary policy, more aggressive rate cuts and a Fed more aligned with Trump’s growth-first agenda.
Q6: When will the nomination happen?
The exact timing is unclear. Powell’s term ends in May 2026, and the market tie-in to “before Jan 20, 2029” gives a broad window. The process involves the President’s selection and Senate confirmation.