Trump says he'll announce his Fed pick Friday morning. Kevin Warsh seen getting president's nod for the key economic post.

By Robert Schroeder

Warsh leapfrogs Rieder as president plans to name critical position

Kevin Warsh, a former Fed governor, sits second from left as he takes part in a panel discussion in April 2024 in Washington.

President Donald Trump said he'll announce his nominee to chair the Federal Reserve on Friday morning - and prediction markets have turned sharply toward a former Fed governor for the post.

It's now Kevin Warsh who's taking the lead in both Polymarket and Kalshi, just hours after Wall Street veteran Rick Rieder was seen getting the nod for the critical job.

"I'll be announcing the Fed chair tomorrow morning," Trump said late Thursday in Washington at the premiere for "Melania," a documentary film about the first lady.

The Wall Street Journal reported that Trump's advisers have been told he is expected to nominate Warsh. Bloomberg separately reported that the White House is preparing for Trump to nominate the former central banker as Fed chief.

MarketWatch has reached out to the White House for comment.

Rieder, chief investment officer of global fixed income at BlackRock (BLK), was the favorite Thursday, ahead of three other finalists for Fed chair, including Warsh. The others are Kevin Hassett, who heads the White House National Economic Council; and Christopher Waller, a Trump-appointed Fed governor.

Trump had earlier promised an announcement next week, speaking at a cabinet meeting at which he also reiterated his longstanding criticism of the current chair, Jerome Powell.

"A lot of people think that this is somebody that could've been there a few years ago," Trump told reporters Thursday night, without naming his choice. The president considered Warsh for the Fed job but went with Powell, on whom he later soured.

On Polymarket, Warsh's chances of being named Fed chair were at 94%. Kalshi put him at 96%.

Trump's comments came a day after the Fed held interest rates steady in a range between 3.5% and 3.75%.

The president has frequently called for rate cuts, and said in a social-media post Thursday morning that there was "absolutely no reason to keep them so high."

Earlier this year, analysts at Evercore ISI said that Warsh, as Fed chair, "would be more or less as dovish as Hassett" through the end of this year, meaning in support of lower interest rates, but that he would be more likely to step away from that stance in 2027 or 2028 if the economy got too hot.

In a note from December, Deutsche Bank analysts said that while Warsh has recently argued for lower rates, "we do not view him as structurally dovish. His views while he was a governor around the [2008 global financial crisis] at times skewed more hawkish than his colleagues, particularly on the balance sheet."

Rieder has supported bringing rates down to 3%. "The Fed has got to get the rate down to 3% - I think that is closer to equilibrium," he said in a recent CNBC interview.

Now see: Where one of Trump's candidates to be Fed chair wants to take interest rates

Polymarket has a data partnership with Dow Jones, the publisher of MarketWatch.

-Robert Schroeder

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