The Fed Chair Change Impacts Global Markets: Hassett Leads the Way, Potentially Triggering a Crypto Christmas Rally; Hawkish Warsh's Appointment Could Be the Biggest Negative Factor
Author: Yuuki, TechFlow
Current Fed Chair Powell's term expires in May 2026. Yesterday, US Treasury Secretary Bessett revealed that Trump is highly likely to announce his nominee for the next Fed Chair before Christmas. The Fed Chair's monetary policy stance will significantly influence the pace and end of future interest rate cuts. As the market most sensitive to liquidity and interest rates, the dovish or hawkish stance of the next Fed Chair is crucial. This article will provide an overview of the policy stances of the current leading candidates, their impact on the crypto industry, their likelihood of selection, and key timing points.
1. Kevin Hassett: The Most Dovish Candidate, Trump's Economic Advisor (Most Beneficial)
Hassett is the former Chairman of the White House Council of Economic Advisers, a core economic advisor to Trump, and a candidate capable of bringing Trump's interest rate-cutting intentions to the Fed. He has publicly expressed support for deeper and faster interest rate cuts to stimulate economic growth; at the same time, his friendly attitude towards the crypto market, viewing Bitcoin as a tool to hedge against inflation, may drive the relaxation of regulations on the crypto market. If Hassett is elected Chairman of the Federal Reserve, it will be an absolute boon to the interest rate-sensitive crypto market, and rapid and significant interest rate cuts will bring the next liquidity bull market for risk assets.
2. Kevin Warsh: The most hawkish candidate, supports CBDC and opposes decentralization (most bearish)
Warsh is a former Federal Reserve Governor and a fellow at the Hoover Institution. He has long held a hawkish stance on monetary policy, favoring interest rate tightening and prioritizing inflation prevention (and advocating for reducing the central bank's balance sheet). If he takes office, it may delay or limit the rapid decline in interest rates, thereby suppressing the valuation and capital inflows of crypto risk assets. At the same time, Warsh has publicly supported the development of a CBDC (Central Bank Digital Currency) in the United States. For Crypto Fundamentals, which pursue decentralization and censorship resistance, Warsh's appointment is also a negative factor.
3. Christopher Waller: A moderate candidate, supporting stablecoins (neutral)
Waller is a current Federal Reserve Governor with a moderately dovish stance on monetary policy, supporting gradual interest rate cuts. He has publicly stated that digital assets can supplement payment tools and believes that stablecoins, under proper regulation, can strengthen the dollar's position. Waller's moderate style may limit the occurrence of large-scale easing. If he takes office, the future evolution of interest rate paths requires further analysis of the overall composition of the voting committee.
4. Rick Rieder: Neutral to dovish, positive for BTC and other mainstream assets (positive)
Rieder is BlackRock's Global Head of Fixed Income, directly controlling trillions of dollars in asset allocation. His monetary stance is neutral to dovish, emphasizing that the Federal Reserve should remain cautious and flexible after reaching the neutral interest rate. He also believes that in an environment where traditional assets are converging, cryptocurrencies have unique safe-haven and hedging value, calling Bitcoin the gold of the 21st century. If he takes office, it may attract institutional funds to the crypto market, smoothing out its volatility and benefiting mainstream crypto assets such as BTC.
5. Michelle Bowman: A hawkish candidate who rarely comments on the crypto market (negative)
Bowman is a current Federal Reserve Governor. Her hawkish monetary policy stance is even stronger than Warsh's. Despite widespread market expectations of interest rate cuts and pressure from the Trump administration, she has explicitly advocated for maintaining high interest rates for a longer period and has repeatedly stated that further rate hikes are possible. If she takes office, it will undoubtedly be a substantial negative for the crypto market and risk assets.
The probability of the above five candidates being elected:
Currently, the nomination process is in its final stages. In the Polymarket prediction market, Kevin Hassett leads by a wide margin with a 52% probability of nomination. Bloomberg exclusively reports Hassett as the frontrunner; second is Christopher Waller with a 22% probability; third is Kevin Warsh with a 19% probability; followed by Rick Rieder at 2%; and Michelle Bowman at 1%.
Key Timelines to Watch: The replacement of the Federal Reserve Chair involves two stages. The first stage involves Trump's team interviewing and screening candidates to determine the final nominee, who will be nominated by only one person. According to Treasury Secretary Bessant's statement, Trump will formally announce his nominee before Christmas. If Hassett is confirmed as the nominee, the crypto market will likely see a Christmas rally. The second stage involves the Senate vote after the nominee is confirmed. The Senate is expected to hold hearings in January or February 2026, followed by committee and full votes in March or April. It's worth noting that Polymarket currently has a 32% probability that Trump will not formally announce his nominee in December.
Summary: Hassett currently has a leading probability of being elected, but this has not yet been reflected in bond yields and risk asset prices. Continued monitoring of this development is necessary. In the short term, if Trump confirms Hassett's nomination before Christmas, the crypto market will likely see a Christmas rally. In the long term, the monetary policy stance of the next Federal Reserve Chair will directly impact the price performance of risk assets over the next four years.