Author: Cookie, BlockBeats
On the prediction market Polymarket, the probability of Hassett being elected as the new Federal Reserve Chairman has risen to 86%, far ahead of other potential candidates for the position.
If nothing unexpected happens, Kevin Hassett will be the next Federal Reserve Chairman, Trump's favorite.
The actions of the Federal Reserve have always been a significant factor influencing the cryptocurrency market. So, if Hassett ultimately becomes the new Federal Reserve Chairman as the market expects, what impacts can be anticipated on the market?
Accelerated Rate Cuts
Hassett stated at the end of November that pausing rate cuts at this time would be "a very bad timing," as the government shutdown has already hindered economic growth in the fourth quarter. He expects the government shutdown to lead to a 1.5 percentage point decline in fourth-quarter GDP. Meanwhile, he pointed out that the Consumer Price Index (CPI) in September showed inflation performing better than expected.
Earlier, on November 13, Hassett indicated that he expected fourth-quarter GDP to decline by 1.5% due to the government shutdown, seeing little reason not to cut rates.
Therefore, if Hassett becomes the new Federal Reserve Chairman, he is expected to push for faster rate reductions, potentially lowering the federal funds rate to below 3%, or even close to 1%, to stimulate economic growth and employment.
This is also what Trump wants to see.
Resuming QE
On December 1, the Federal Reserve officially ended its Quantitative Tightening (QT) policy, marking the conclusion of the balance sheet reduction process that began in 2022. Although some believe the effects may not be seen until early next year, expectations for liquidity easing have gradually materialized.
Hassett may be more tolerant of inflation, viewing the 2% inflation target as a flexible ceiling rather than a strict anchor. The focus would shift to employment and GDP growth, reducing reliance on data-dependent "gradual" decision-making, and moving towards more proactive pro-growth interventions.
In September of this year, Hassett stated in an interview with Fox Business that the U.S. is in a period of supply-side prosperity, where current interest rates are hindering economic growth and job creation in an economy without real inflation. He also mentioned that the U.S. is expected to achieve 4% GDP growth.
The perspective of prioritizing economic development over inflation control makes it likely that the Federal Reserve under Hassett will restart QE.
Impact on Bitcoin
Every candidate for Federal Reserve Chairman, regardless of whether they directly discuss cryptocurrency topics, will have a structural impact on the cryptocurrency industry. Hassett has a notable connection to the cryptocurrency sector; he has publicly held Coinbase stock worth millions and has served as a member of Coinbase's advisory board.
Additionally, he has participated in a White House working group on digital asset policy, advocating for space for innovation within the regulatory framework, and believes that cryptocurrency technology is an important variable influencing the future economic structure. He has stated that Bitcoin will "rewrite the financial rules."
Hassett's crypto background may reduce regulatory uncertainty and promote institutional engagement and the Federal Reserve's exploration of cryptocurrency integration. This could enhance Bitcoin's legitimacy and liquidity, potentially driving prices to new highs.
Many traders are optimistic about the market under Hassett's leadership, believing that the bull market will begin only after he takes office, expected around mid-next year, making the second half of 2026 crucial for the cryptocurrency industry.