This is an interesting one…

In a recent Truth Social post, Trump said "I want my new Fed Chairman to lower Interest Rates if the Market is doing well, not destroy the Market for no reason whatsoever...

Anybody that disagrees with me will never be the Fed Chairman!"

Kevin Hassett (45%), Loyalist, Star Wars Supply-Sider

Hassett served as Chairman of the Council of Economic Advisers under Trump.

He’s tough, long-time conservative think-tank economist who advised McCain, Bush, and Romney before eventually becoming one of Trump’s most visible economic defenders on TV.​

During the 2000 primary, he apparently joked that the Bush campaign was the “Death Star,” (nod to his fandom of Star Wars) and a wink at how dominant Bush’s operation was versus McCain’s.​

He understands the President's desire for lower rates, and outside of pure macro, he once co‑authored a much-mocked piece arguing comic books were a surprisingly strong investment asset class, which critics still cite as evidence of his optimism about markets and valuations.​ He’s not wrong

Some say he’d generate the biggest market reaction—he's vocal, he goes on TV, and he's not afraid to say what Trump wants to hear.

His nomination would signal a Fed that is collaborative and willing to tolerate the risk of higher inflation in the name of economic growth.

Some argue lower rates guarantees inflation.

The market sees him as the most likely pick because he's the most direct path to the low-rate policy Trump wants. He might really be the fastest path to low-rates. But is that enough?

Warsh is married to Jane Lauder, Estée Lauder’s billionaire granddaughter, which puts him inside one of America’s wealthiest dynastic families. He’s now a direct in‑law link to Ronald Lauder (a long‑time Trump associate). 

Warsh was appointed to the Fed Board in his mid‑30s, making him one of the youngest governors in the modern era and a close crisis‑era confidant of Ben Bernanke during 2008–2009.​

By all account, he’s likely the most qualified candidate in the mix.

He was critical of QE and has a reputation for being more concerned with inflation and debt than short-term market gains.

He's also more hawkish than Hassett, which means bonds wouldn't love his nomination.

The market is giving him a 32% chance, which suggests there's a real possibility Trump could opt for a more conventional, credible choice.

Don't rule him out—Trump is known for changing his mind.

Honestly, I imagine all three candidates would likely lead to lower rates in the short-term.

That's what Trump wants, and that's what the market is pricing in.

But they won't all lead to lower rates in the long-term.

Hassett, in particular, could create a scenario where the Fed loses credibility, inflation expectations rise, and the bond market forces rates higher despite the Fed's intentions.

Warsh, on the other hand, might cut rates initially to appease Trump, but there’s an argument to be made whether he’d likely be more disciplined over the long run.

The market is focused on the short-term signal. It's not fully pricing the long-term implications of a politicized Fed.

Regardless of who is nominated, the message is clear: the Fed will be under political pressure to keep rates low.

This means:

Higher inflation expectations. If the market believes the Fed won't fight inflation aggressively, inflation expectations will rise.

More market volatility. The uncertainty around Fed policy will lead to more volatility in stocks, bonds, and currencies.

A weaker dollar (maybe). A dovish Fed is generally bearish for the dollar, but if Europe continues to struggle, the dollar could stay strong regardless.

The market is pricing the nomination. It's not fully pricing the second-order effects. That's where the opportunity is.

Until then, subscribe to Prediction Market Edge for a 3-minute daily rundown of what's moving, what's mispriced, and where the opportunities are in prediction markets.

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