On Tuesday, Nick Timiraos, a reporter for the Wall Street Journal known as the "new Fed mouthpiece," dropped another bombshell: Trump has essentially decided to appoint Kevin Hassett as the next Federal Reserve chairman.
If true, this would be one of the most important economic and personnel decisions of Trump's second term, enough to rewrite the fiscal, monetary, and global risk asset trends of the United States for years to come.
As for the crypto market, Yongqi believes this could be a major turning point in structural trends.
I. Trump locks in Hassett: Loyalty > Technological Ability
Timiraos stated:
"Trump told reporters on Sunday: 'I know who I'm going to vote for.' When asked if it was Hassett, he just smiled."
In Trump's political system, "loyalty" is the first principle, and Hassett precisely meets that requirement:
He previously served as Chairman of the White House Council of Economic Advisers, returned as a senior advisor during the 2020 pandemic, and will later become Director of the National Economic Council after Trump takes office in early 2025. He has a close relationship with Trump and serves as the "central brain" for policy implementation.
Most importantly, Hassett publicly supported Trump's demand for rapid interest rate cuts.
Last week, when news broke that Hassett was a frontrunner, long-term interest rates fell immediately, which was seen as the market pricing in his monetary policy stance in advance.
For the market, Hassett means a faster and more aggressive rate-cutting cycle.
II. Selection for the Final Rounds: But Trump May Still Vow to Change Course
The five candidates are: Kevin Hassett, Kevin Warsh (former Federal Reserve Governor), Christopher Waller (current Federal Reserve Governor), Michelle Bowman (Federal Reserve Governor), and Rick Rieder (BlackRock executive). In a previous article, I analyzed the strengths of these five candidates: Who will be the next Federal Reserve Chairman? Hassett vs. Waller.
Treasury Secretary Ben Bessent is overseeing the entire selection process and expects Trump to announce his nomination before Christmas.
But those familiar with Trump know that anything can be reversed until an official announcement is made.
Last week, he still asked those around him to "provide reasons for Hassett or Warsh," and some even advised him to be careful: "If you nominate Hassett, you will lose the NEC directorship."
It's worth noting that Bessant (Treasury Secretary) is considered the only person who can change Trump's decision. Although she has publicly denied wanting to run for office, Trump "greatly admires her."
In other words, while Hassett's victory is significant, it is not yet a foregone conclusion.
III. The Controversy Surrounding Hassett:
Can he really control the Federal Reserve? Or is he just an "executor" of Trump?
Hassett's professional qualifications are indeed impressive: a PhD in economics, a former Federal Reserve economist, a senior figure within the conservative camp, and his appointment was confirmed by a bipartisan majority in the Senate in 2017.
But the same problem also exists:
Question 1: Is his temperament suitable for the position of Federal Reserve Chairman? Several former colleagues believe he is too political.
Question 2: Can he withstand Trump at crucial moments?
In recent years, he has frequently criticized the Federal Reserve publicly, accusing Powell of "political bias" and supporting a more aggressive rate-cutting cycle, while also standing with Trump.
This is in great conflict with the traditional principle of "central bank independence".
Hassett = a Federal Reserve more easily influenced by the White House? This is a concern for many economists.
IV. The most pressing issues in the crypto market:
Hassett's appointment = an early crypto bull market? Let's get to the core: What does Hassett really mean for the crypto market?
First, policy inclination: a faster and more aggressive interest rate cut cycle.
In a recent interview, Hassett stated, "The market's reaction to me proves that I can achieve my rate cut target without damaging the credibility of inflation." To put it simply, he won't get bogged down in "central bank independence," and unlike Powell, won't insist on "maintaining high interest rates for a longer period," instead moving rapidly towards an "easing cycle."
The impact on the crypto market is very direct: lower US Treasury yields will cause liquidity to flow back into risky assets, and high-beta assets such as Bitcoin and Ethereum will react in advance.
Historically, all major bull markets for Bitcoin have occurred during periods of interest rate cuts or quantitative easing (QE).
Second, Hassett = a more explicit "anti-regulatory" tendency.
Although the Federal Reserve under Powell did not directly regulate the crypto market, its monetary policy and financial stability framework were consistently "unfriendly" to the crypto industry.
Hassett's attitude differed from that of the White House team: he was friendly to crypto ETFs, took a positive attitude towards crypto payments, did not believe that crypto posed a systemic threat to the US financial system, and supported "decentralized innovation" as part of the US's technological competitiveness.
Trump has clearly stated, "The United States should be the center of crypto assets." Hassett's appointment means that the crypto industry has gained stable expectations on the policy front. This is key to driving institutional funds into the market.
Third, the probability of a weaker US dollar is increasing: cryptocurrencies will naturally benefit.
If Hassett pursues an aggressive rate-cutting strategy, real interest rates will decline rapidly; the US dollar index (DXY) may enter a period of correction, and capital will flow from the bond market to risk assets. Crypto assets, as anti-dollar assets, will directly benefit.
Fourth, comparison: What if Waller ultimately takes office?
Waller is a typical neutral hawk: he is in no hurry to cut interest rates, emphasizes that inflation must be reduced to 2%, and most importantly, he does not have a strong attitude towards crypto assets.
If Trump ultimately chooses Waller, it means: a slower pace of interest rate cuts, a longer period of dollar strength, and a slowdown in the cryptocurrency market.
The market's preference for Hassett is very clear: "crypto-friendly + rapid interest rate cuts" is what capital wants.
V. A true bull market may begin in 2026.
If Hassett becomes the Federal Reserve Chairman, the crypto market may see three major structural trends.
Trend 1: The main upward wave of the bull market will begin ahead of schedule in 2026.
Reasons: The interest rate cut cycle was brought forward, US Treasury yields fell rapidly, institutions reallocated to high-risk assets, ETF inflows increased again, and technology and crypto assets rose in tandem.
Trend 2: Ethereum (ETH) becomes the biggest beneficiary.
Because ETH possesses both technological and monetary attributes, as well as application-layer asset attributes.
Against the backdrop of "tech stock recovery + weakening dollar", ETH benefits more and often outperforms BTC.
Trend 3: A Complete Reversal in the Regulatory Environment of the Crypto Industry
The Trump-Hassett partnership is essentially about "deregulation + monetary easing + capital controls easing".
This will lead to: the full commercialization of stablecoins such as USDC/USDT, the rapid development of crypto payments in the United States, and the faster integration of crypto assets into the mainstream financial product system.
Significance for global markets: The US will once again dominate the crypto narrative.
In conclusion, Yongqi said:
This selection of the Federal Reserve Chair is not just a personnel change, but a shift in the times.
The Federal Reserve Chairman's influence is not on interest rates, but rather on: the dollar system and global capital flows; the asset price system and the global status of new assets (including crypto); and most importantly, the hegemonic status of the United States during the Trump era.
Hassett's appointment means that the United States will usher in a more aggressive, more politicized, and more market-friendly monetary cycle.
For the crypto market, this could be a major variable.
In-depth observation, independent thinking, and value that goes beyond price.
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Finally: Many of the views expressed in this article represent my personal understanding and judgment of the market, and do not constitute investment advice for you.
