Author: Cookie, BlockBeats
On the prediction market Polymarket, the probability of Hassett being elected as the next Federal Reserve Chairman has risen to 86%, far ahead of other possible candidates.
Barring any unforeseen circumstances, Kevin Hassett will be the next Federal Reserve Chairman, Trump's favorite.
The actions of the Federal Reserve have always been an important factor affecting the cryptocurrency market.
So, if Hassett ultimately becomes the new Federal Reserve Chairman as the market expects, what impact will it have on the market? Accelerated Interest Rate Cuts Hassett stated at the end of November that pausing interest rate cuts at this time would be "a very bad time" because the government shutdown had already dragged down fourth-quarter economic growth. He predicted that the government shutdown would cause a 1.5 percentage point decrease in fourth-quarter GDP. At the same time, he pointed out that the September Consumer Price Index (CPI) showed that inflation was performing better than expected. Earlier, on November 13, Hassett stated that he expected fourth-quarter GDP to decline by 1.5% due to the government shutdown. There weren't many reasons not to cut interest rates. Therefore, if Hassett becomes the new Federal Reserve Chair, he is expected to push for faster interest rate cuts, potentially lowering the federal funds rate 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 1st, the Federal Reserve officially ended its quantitative easing (QT) policy, marking the end of the balance sheet reduction process that began in 2022. Although some believe the effects may not be apparent until early next year, the expectation of looser liquidity has been gradually realized. Hassett may be more lenient on inflation, viewing the 2% inflation target as a flexible upper limit rather than a strict anchor. The focus will be on employment and GDP growth, reducing reliance on data-driven "gradual" decision-making and shifting towards more proactive pro-growth interventions. In a September interview with Fox Business, Hassett stated that the US is experiencing a period of supply-side prosperity, and that current interest rates are hindering economic growth and job creation in an economy without genuine inflation. He also indicated that the US is on track to achieve 4% GDP growth. This prioritization of economic development over inflation control makes the resumption of quantitative easing (QE) by the Federal Reserve under Hassett's leadership a likely possibility. Regarding the impact on Bitcoin, every candidate for Federal Reserve Chair, regardless of whether they directly discuss cryptocurrencies, will have a structural impact on the cryptocurrency industry. Hassett, in particular, has significant ties to the industry; he has publicly held millions of dollars worth of Coinbase stock and served on Coinbase's advisory board. Furthermore, he participated in the White House working group on digital asset policy, advocating for leaving room for innovation within the regulatory framework, and believes that crypto technology is a crucial variable influencing the future economic structure. He has stated that Bitcoin will "rewrite the rules of finance." Hassett's crypto background may reduce regulatory uncertainty, encouraging institutions and the Federal Reserve to explore cryptocurrency integration. This could enhance Bitcoin's legitimacy and liquidity, potentially driving prices to new highs. Many traders are optimistic about the market after Hassett takes office, believing that the bull market will begin after his inauguration, expected to start around the middle of next year. Therefore, the second half of 2026 is crucial for the cryptocurrency industry.
Kikyo
