The official start of the selection process for the new Chair of the U.S. Federal Reserve (Fed) marks an important turning point, which could significantly impact monetary policy in the coming time. Although the initial reaction of the market has been quite muted, investors are closely monitoring every development.
In an interview with Bloomberg TV, U.S. Treasury Secretary Scott Bessent confirmed that the selection process has officially begun. The final decision will be announced by the White House – under the leadership of President Donald Trump. The current term of Fed Chair Jerome Powell will end in 2026, and information about the successor is expected to be announced in the second half of 2025.
Initial market reaction: Waiting and cautious
Currently, both the traditional financial market and the cryptocurrency market remain stable. The prices of Bitcoin (BTC), Ethereum (ETH), and stablecoins have shown almost no significant fluctuations. On-chain data shows that trading activity and cash flows in and out of DeFi protocols remain at normal levels, reflecting the 'watching from the sidelines' mentality of investors.
However, historically, changes in the leadership of the Fed often lead to significant market volatility. Changing the head of the Fed is not just a change of personnel; it can also lead to adjustments in interest rate policy direction, inflation control, and policies related to digital assets.
Potential impacts on the crypto market and monetary policy
A new Fed chair could bring a different approach to issues such as interest rate control, balance sheet reduction, or regulations regarding digital assets. This will directly affect liquidity levels, risk asset valuations, and capital accessibility across the market.
Especially in the context where the crypto market is increasingly intertwined with U.S. monetary policy and interest rates, any changes in the Fed's direction could lead to major adjustments in the price trends of Bitcoin, Ethereum, as well as the development levels of DeFi platforms.
Conclusion: An important transitional period but with many unknowns
The initiation of the process to appoint a new Fed Chair is a sign that U.S. policymakers have begun preparing for the next phase of the economic cycle. Although there is no immediate noticeable impact, investors – both in traditional finance and the crypto market – are closely watching this development to reshape their investment strategies in the medium and long term.
As Mr. Scott Bessent stated: 'The official process has begun.' This is not only the first step toward selecting new Fed leadership but also opens a new chapter with many potentials and challenges for the entire global financial ecosystem.
