Executive-Level Briefing
President Donald Trump confirmed today that he has selected his nominee to succeed Federal Reserve Chair Jerome Powell, whose term expires in May 2026, with an announcement expected imminently—potentially before Christmas. Markets interpreted the move as a shift toward a more dovish, pro-growth monetary stance, with Kevin Hassett emerging as the frontrunner—a top economic advisor known for advocating aggressive interest-rate cuts. This aligns with Trump's push for easier policy, coinciding with the formal end of quantitative tightening (QT) today, unlocking ~$80–120 billion in monthly liquidity from Q1 2026.
Initial reactions: Equities rallied to session highs, Treasury yields dipped (10-year -5 bps to 4.18%), the dollar softened (DXY -0.6% to 101.80), gold climbed +1.2% to $2,712/oz, and Bitcoin rebounded +2.8% to $97,900 after an intraday wick. Volatility spiked briefly (VIX +1.2 to 17.8) before easing, reflecting bets on accelerated easing under a Trump-aligned Fed.
Key Implications
Dovish Pivot Signal: Hassett's potential nomination suggests a Fed more tolerant of inflation and fiscal expansion, supporting Trump's agenda of tariffs, stimulus ($2,000 checks), and extended mortgages. This could accelerate the FOMC's path to sub-4% funds rate by mid-2026, boosting risk assets but risking longer-term inflation.
Regime Shift Risks: While markets price continuity, a "puppet" Chair could erode Fed independence, amplifying tariff-related volatility. Counterpoint: FOMC composition limits full control—only gradual shifts possible.
Liquidity Tailwind: QT's conclusion today amplifies the bullish setup, with institutions like JPMorgan positioning for expansion. Broader macro (AI boom, ETF inflows, GENIUS Act) favors liquidity-sensitive plays.
Asset-Class Reactions & Projections
Asset Class
Immediate Move
1-Week Outlook
Key Drivers
Equities (S&P 500 / Nasdaq)
+1.8% / +2.1%
+2–4% (to 6,100 / 21,500)
Dovish expectations; tech/AI lead
Rates (10-yr Yield)
-5 bps to 4.18%
-10–15 bps (sub-4.10%)
Rate-cut bets; liquidity surplus
USD (DXY)
-0.6% to 101.80
-1–2% (testing 100)
Weaker vs. EUR/JPY on policy gap
Gold (XAU)
+1.2% to $2,712
+3–5% ($2,750+)
Inflation hedge; dollar weakness
Bitcoin (BTC)
+2.8% to $97,900 (post-dip)
+5–10% ($105K+)
Regime change; reflation tolerance 08bd9d
Crypto-specific: XRP dipped -5.3% initially before recovering, signaling sensitivity to policy uncertainty; broader altcoins followed BTC's rebound.
Recommended Institutional Positioning
Equities: Long SPY Dec 6100 calls; overweight tech via QQQ. Hedge with VIX Dec 20+ calls.
Rates: Receiver spreads in SOFR futures; short 10-yr via TLT calls.
FX: Short USD/JPY into 150; long EUR/USD 1.0850/1.1050 call spread.
Commodities: Long gold Jan26 2750 calls; energy basket on industrial push.
Crypto: BTC 100K call ladder + 90K protective puts; selective alts (ETH, SOL) on liquidity flow.
Final Word
Trump's Fed pick confirmation marks a pivotal regime shift toward politically aligned, reflationary policy—bullish for risk assets in the near term but with tail risks on independence and inflation. Markets aren't pricing perfection, but they're betting on continuity with a dovish twist. Stay vigilant for the official name-drop; volatility remains cheap.
1 December 2025 – Liquidity unlocked, direction upward.
@Crypto Universe official @Cryptonews_Official
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