Trump opened window for Warsh to win Fed Chair race, says Strategas' Clifton

Core Viewpoint - The prediction markets indicate that Kevin Hasset has a 53% chance of being appointed as the new Fed Chair, while Kevin Worsh's odds have dropped to 34%, highlighting a competitive selection process for the position [1]. Economic Growth and Monetary Policy - Anticipated GDP growth is expected to accelerate due to $400 billion in fiscal policy and the Fed's rate cuts, leading to significant fiscal and monetary policy actions by 2026 [3]. - Historically, economic growth tends to accelerate from the first year of a president to the midterm year, which typically results in rising bond yields and a defensive stock market [4]. Candidates' Perspectives - Both candidates, Hasset and Worsh, believe in a productivity boom that could allow for lower Fed funds rates, with recent employment data suggesting a need for a lower neutral rate [6]. - The differences between the two candidates may be more pronounced in their approaches to the Fed's balance sheet rather than in their rate policies [8]. Balance Sheet and Financial Regulation - Worsh has been described as hawkish regarding the Fed's balance sheet, arguing it should not be at its current level, which is linked to financial regulation issues [9][10]. - The Fed is currently expanding its balance sheet to address a shortage of bank reserves, a situation expected to change with financial deregulation anticipated in 2026 [10][11].