The Change of the Federal Reserve Chair Impacts Global Markets: Hassett Leads the Race, Potentially Igniting a Crypto Christmas Rally, While Hawkish Warsh's Appointment Could Be the Biggest Negative

Author: Yuuki, Deep Tide TechFlow

Current Federal Reserve Chair Jerome Powell's term will expire in May 2026. Yesterday, U.S. Treasury Secretary Basant revealed that Trump is likely to announce the nomination for the next Federal Reserve Chair before Christmas. The monetary policy stance of the Federal Reserve Chair will significantly influence the pace and endpoint of future interest rate cuts. As the market most sensitive to liquidity and interest rates, the monetary policy position of the next Federal Reserve Chair—whether dovish or hawkish—is crucial. This article will overview the policy positions of currently popular candidates and their potential impact on the crypto industry, likelihood of selection, and key timelines.

1. Kevin Hassett: The Most Dovish Candidate, Trump's Economic Advisor (Most Positive)

Hassett is the former Chair of the White House Council of Economic Advisers and a core economic advisor to Trump, capable of bringing Trump's desire for interest rate cuts into the Federal Reserve. He has publicly expressed support for deeper and faster rate cuts to stimulate economic growth; at the same time, he has a friendly attitude towards the crypto market, viewing Bitcoin as a tool to hedge against inflation, which may promote regulatory easing for the crypto market. If Hassett is elected as Federal Reserve Chair, it would be an absolute positive for the interest rate-sensitive crypto market, as rapid and significant rate cuts could lead to the next liquidity bull market for risk assets.

2. Kevin Warsh: The Most Hawkish Candidate, Supports CBDC and Opposes Decentralization (Most Negative)

Warsh is a former Federal Reserve Governor and a researcher at the Hoover Institution, with a long-standing hawkish stance on monetary policy, favoring interest rate tightening and prioritizing inflation control (and advocating for a reduction in the central bank's balance sheet). If he takes office, it may delay or restrict rapid declines in interest rates, thereby suppressing the valuation and capital inflow of crypto risk assets. Additionally, Warsh has publicly supported the U.S. development of a CBDC (Central Bank Digital Currency), which would be negative for crypto fundamentalism that pursues decentralization and anti-censorship.

3. Christopher Waller: A Steady Candidate, Supports Stablecoins (Neutral)

Waller is a current Federal Reserve Governor with a moderately dovish stance on monetary policy, supporting gradual interest rate cuts. He has stated in public that digital assets can serve as a complement to payment tools and believes that under proper regulation, stablecoins can enhance the dollar's status. Waller's steady style may limit the occurrence of significant easing; if he takes office, the evolution of future interest rate paths will require 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 the Chief Investment Officer of Global Fixed Income at BlackRock, directly controlling the allocation of trillions of dollars. His monetary stance is neutral to dovish, emphasizing that the Federal Reserve should remain cautious and flexible after reaching a neutral interest rate. He also believes that in an environment where traditional asset correlations converge, cryptocurrencies have unique hedging and safe-haven value, referring to Bitcoin as the gold of the 21st century. If he takes office, it may attract institutional capital to allocate to the crypto market, stabilizing the volatility of the crypto market, which is positive for BTC and other mainstream crypto assets.

5. Michelle Bowman: A Hawkish Candidate, Rarely Comments on the Crypto Market (Negative)

Bowman is a current Federal Reserve Governor, and her hawkish monetary policy stance is even more pronounced than Warsh's. Amid widespread market expectations for interest rate cuts and pressure from the Trump administration, she has clearly advocated for maintaining high interest rates for a longer period and has repeatedly stated that she does not rule out the possibility of further rate hikes. If she takes office, it would undoubtedly pose a substantial negative for the crypto market and risk assets.

Current Likelihood of Election for the Five Candidates

Currently, this event is in the presidential nomination stage. In the prediction market Polymarket, Kevin Hassett leads with a 52% nomination probability, with Bloomberg exclusively reporting Hassett as the frontrunner; the second is Christopher Waller with a 22% nomination probability; the third is Kevin Warsh with a 19% nomination probability; followed by Rick Rieder at 2%; and Michelle Bowman at 1%.

Key Timelines to Watch

The change of the Federal Reserve Chair involves two stages. The first stage is the Trump team's interview and selection of candidates to determine the final nominee, which will be only one person. According to U.S. Treasury Secretary Basant's statement, Trump will officially announce the nominee before Christmas. If Hassett is confirmed as the nominee, it is highly likely that the crypto market will experience a Christmas rally. The second stage is the confirmation of the nominee, which will be submitted to the Senate for a vote; the Senate is expected to hold hearings in January-February 2026 and conduct committee and full votes in March-April. It is important to note that there is still a 32% probability in Polymarket that Trump will not officially announce the nominee in December.

In summary: Currently, Hassett has the highest probability of being elected, but this has not yet been reflected in bond yields and risk asset prices. Continued attention to the progress of this event is necessary. In the short term, if Trump confirms Hassett's nomination before Christmas, the crypto market is likely to experience 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.

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