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The U.S. Federal Reserve is firmly in the spotlight. With Jerome Powell’s term ending, speculation is mounting about his successor. One name that comes up increasingly often is Kevin Hassett, an economic advisor to Donald Trump. His potential appointment is sparking debate, especially as Trump has become more vocal about his desire for interest rate cuts. Can the Fed remain independent under Hassett’s leadership?
Hassett as Top Candidate – Crypto Could Benefit #
Kevin Hassett is considered a serious contender to become the next chair of the Federal Reserve. On the prediction platform Polymarket, his chances are currently estimated at 52%, putting him ahead of former Fed governor Kevin Warsh. While Warsh’s odds rose quickly after a recent meeting with Trump, Hassett remains the favorite for now.
Expectations for Hassett vary. In the crypto sector, there is hope for looser monetary policy, which includes interest rate cuts that are generally seen as a positive catalyst for the industry. Lower interest rates typically mean more liquidity and a greater appetite for risk. This makes him a logical choice for Trump in the eyes of many market participants, as the president views lower rates as fuel for the economy and financial markets.
Hassett: The Fed Should Be Independent #
However, there are also concerns. Hassett is seen as a true Trump insider, and his selection would signal that Trump is trying to tighten his grip on the Fed. These concerns are not unfounded: Trump recently said the Fed should follow his advice on interest rate cuts. The president has also spoken negatively about Fed Chair Jerome Powell in the past for not bowing to his wishes.
It appears Hassett is now trying to allay concerns about political interference. In an interview, Hassett argued that the Fed is supposed to operate independently, even if the president thinks otherwise.
“[Trump] has strong, well-reasoned ideas about what we should do, but ultimately, the Fed’s job is to be independent,” Hassett said.
Powell’s term expires on May 15, making the coming months crucial. The final choice for a new Fed chair could be decisive for the pace of interest rate cuts and, indirectly, for the price trajectory of Bitcoin.