Who will succeed Powell?

Who will become Powell’s successor? This seemingly settled matter has become more uncertain due to the latest statement from JPMorgan Chase CEO Jamie Dimon. White House economic advisor Kevin Hassett was initially considered the frontrunner, but Dimon’s support for another Kevin—former Federal Reserve Governor Kevin Warsh—has shifted the balance of expectations. According to Polymarket’s predictions, Hassett’s probability of being chosen has dropped from nearly 80% to around 50%, while Warsh’s chance has risen from about 10% to approximately 40%. As competition intensifies, the decision that might have been made within the year will likely be delayed until early next year. But this isn’t necessarily a bad thing; it allows candidates to prepare more thoroughly and provides markets with more feedback. For U.S. monetary policy at a crossroads, this could serve as a better stress test.

Currently, the most accurate prediction is that the next Federal Reserve Chair will definitely be a Kevin. Both Kevins are viewed by Trump as “communicable” central bank leaders, but their approaches and styles are starkly different: one is deeply embedded in the White House political machinery, skilled at reshaping macro narratives through TV debates and campaign rhetoric—a “policy enforcer”; the other is a technocrat from the central banking system, attuned to market pulse and balancing independence with political realities. At a time when inflation remains shadowed and rate paths are still debated, choosing either of them is an early test of how the Fed will handle politics over the next five years.

Hassett’s trajectory almost mirrors Trump’s economic agenda. His experience on the National Economic Council and the President’s Economic Advisory Board makes him a prominent advocate for “rate cuts first”—publicly stating that “there is still ample room to cut rates” and framing cheaper auto loans and mortgages as quantifiable political commitments. His ability to translate monetary policy into consumer welfare aligns with voter intuition and reinforces White House expectations for monetary easing. Meanwhile, his criticism of Fed independence and public dissatisfaction with the current Chair have raised concerns among markets and academia: when the distance between the central bank and the administration is deliberately shortened, will the long-term credibility of price stability suffer?

Warsh’s narrative resembles a seasoned actor returning to the stage, familiar with the Fed’s “script.” His experience as a Fed Governor during Bernanke’s era gives him heightened sensitivity to processes, communication, and managing market expectations—far beyond that of a typical political advisor. In recent interactions with Trump, he also does not rule out lower rates but emphasizes a “consultative, negotiated, gradual” approach. This skill is especially valuable during volatile cycles: it prevents rate cuts from becoming an extension of executive orders and preserves room for professional judgment.

At the same time, Warsh’s criticisms of Fed policy are more structural and potentially disruptive. He believes inflation is a choice—resulting from overly loose monetary policy and excessive fiscal spending. In other words, the various “uncertainties” emphasized by the Fed are rooted in its own actions. Many market participants concerned with U.S. monetary policy share this view. Powell often highlights “uncertainties” in various contexts, asserting that his work is difficult but correct—such statements can sometimes seem like “passing the buck” or clichés. But Warsh argues that monetary independence must be complemented by fiscal coordination. Excessive fiscal looseness, combined with an accommodative monetary stance, only complicates policy and leads to a “policy deadlock.” From this perspective, monetary policy must respond to or hedge against fiscal policy, and both must clarify their respective positions and goals. If monetary policy cannot achieve its dual mandate of “controlling inflation” and “full employment,” then a major overhaul of the framework is necessary. In this regard, Warsh’s policy philosophy appears more pragmatic, while Hassett’s seems to have become merely “practical.” But once large-scale adjustments to monetary policy are needed, an outsider like Hassett, lacking direct management experience, would find it difficult to be the “right person,” as he has no practical operational background beyond theoretical discussions. It’s hard to imagine a TV commentator not only discussing monetary policy but also making academic judgments and strategic adjustments on the internal economic models used by the Fed.

Ironically, despite Hassett’s early lead, he might become a runner-up at the last minute due to technical shortcomings. Dimon’s public support effectively makes Warsh the market’s top choice, and Trump’s final decision may also shift more toward market preferences over time. In other words, if Trump cannot finalize a candidate quickly, Warsh’s technical and academic advantages could be amplified by the passage of time. Specifically, Hassett might deliver quick rate cuts in the short term but fail to anchor long-term inflation expectations, potentially leading to a steeper yield curve. Warsh, on the other hand, would seek a balance between overnight rates and long-term market rates. From another perspective, Warsh might be slightly more “hawkish” than Hassett but would create a more balanced overall interest rate environment, resulting in a smoother yield curve.

Overall, whether the next Chair can clearly and practically delineate the boundary between “short-term political gains” and “long-term institutional credibility” is the fundamental difference between the two Kevins. If the White House wants to turn the Fed into a growth accelerator, Hassett is the more compatible choice; if markets prioritize controllable expectations and professional process, Warsh’s “central bank muscle memory” is more convincing. The decision is not only about the interest rate path but also about institutional culture. This choice will redefine the relationship between the Fed and the administration, and whether “independence” is a principle or a strategy.