Honing In On a Fed Chair Replacement?

Core Viewpoint - The discussion centers around Kevin Hasset being the leading candidate for the next Federal Reserve chair, with potential implications for Fed policy and market expectations [1][2][3]. Group 1: Candidate Analysis - Kevin Hasset is perceived as closely aligned with President Trump's views on Fed policy, which marks a significant shift from previous leadership [3][4]. - There is speculation that Bessant could also be a contender for the chair position, despite his current reluctance to take the job [2][7]. - The prediction markets have shown Hasset consistently at the top, indicating strong market sentiment regarding his potential appointment [4][5]. Group 2: Market Implications - If Hasset acts as a "shadow Fed chair," it could significantly influence market expectations regarding interest rates, particularly between January and April [6][7]. - Current odds for rate cuts after December have decreased to the low 30s, reflecting market skepticism about further rate reductions [6]. - The relationship between the future Fed chair and the President is expected to shape monetary policy and potentially lead to lower rates, which could boost equity markets [3][6]. Group 3: Political Dynamics - President Trump's comments suggest he is dissatisfied with current rates and is considering a change in leadership at the Fed [8][9]. - Trump is reportedly vetting four candidates for the Fed chair position, indicating a strategic approach to selecting a candidate who aligns with his economic vision [9][10]. - The ongoing "apprentice-like" contest for the Fed chair position highlights the political maneuvering involved in the selection process [5][10].