—an analysis of the full-chain impact from dollar liquidity to the cryptocurrency market
Recently, one of the most关注的事件 in American politics and finance is that the Trump team is considering nominating Kevin Hassett to be the next Federal Reserve Chair. The reason this news quickly rose to the top of Wall Street and the macro-finance field is not because of the 'change' itself, but rather because—
The Federal Reserve Chair decides interest rates, interest rates determine global liquidity, and liquidity determines global asset prices.
Whether you are a stock market investor, a bond trader, a commodity participant, or a cryptocurrency holder, the market in the coming years may undergo significant changes due to this appointment.
One, the Federal Reserve Chair is the main valve of the global 'financial faucet'.
The Federal Reserve Chair is not an ordinary official position, but rather:
The decision-makers of global dollar liquidity.
The price setters of global interest rates.
The controller of global risk appetite.
The tools at his disposal include:
Federal funds rate (rate hikes / cuts).
Quantitative easing / tapering (QE / QT).
Asset purchase plan.
Forward guidance (affecting market expectations).
In summary:
Who the chair is is more important than whether the next move is a rate hike or cut.
Because the choice of chair will directly determine the policy direction for the next 3–4 years.
Two, the key controversies surrounding Kevin Hassett's rise: politicization, tendency towards interest rate cuts, and inflation risks.
According to currently disclosed information, Wall Street is nervous because Hassett is perceived to have the following tendencies:
① More inclined towards 'interest rate cuts'.
Tends to stimulate growth with low interest rates.
② More pro-White House.
The market is concerned that his policies may affect the independence of the Federal Reserve.
③ May more quickly push for interest rate cuts or easing tools.
This means short-term liquidity release, but may trigger medium to long-term inflation pressure.
This is in clear conflict with the current market demand for 'steady inflation resistance'.
Therefore, once Hassett takes office:
The U.S. Treasury yield curve may experience severe fluctuations first.
Stocks and commodities will begin to price in easing in advance.
The crypto market is expected to welcome an increase in liquidity.
His policy impact is not point-specific, but rather holistic.
Three, Federal Reserve Chair → Interest rate direction → Liquidity → Global asset prices.
To understand its impact on the market, you can start from this logical chain:
(1) Interest rate direction: If Hassett is more dovish, it will open up expectations for interest rate cuts earlier.
Lower interest rates mean:
Dollar funding costs are decreasing.
Borrowing is cheaper.
Corporate valuation recovery.
Risk appetite is rising.
This is particularly beneficial for tech stocks, innovative industries, and emerging markets.
But at the same time:
The market will worry about the rebound in inflation.
Medium to long-term bonds may be sold off first.
The risk of long-term interest rates rising.
In short:
In the short term, it benefits risk assets, but may bring pressure to the bond market in the medium term.
(2) Dollar liquidity: Easing will drive a global 'water level rise'.
Dollar liquidity affects the valuation benchmarks of all assets.
If Hassett's appointment brings expectations of easing:
The dollar index (DXY) may weaken.
Funds are flowing out of dollar assets.
Emerging markets will benefit in the short term.
Gold and bulk commodities are strengthening.
The crypto market is expected to welcome 're-pricing'.
The more the market expects easing, the more willing funds are to layout high volatility and high growth assets in advance.
(3) Global asset prices: The possible paths of five major assets.
① Stocks: Favorable for technology, semiconductors, and growth stocks.
Expectations for interest rate cuts are strengthening:
The discount rate of tech stocks decreases → Valuation rises.
Medium to long term: Rising inflation expectations → Increasing hedging demand.
Therefore, U.S. stocks will rise first, then fluctuate.
② Bonds: The most direct volatility.
If the market believes he will suppress short-term rates:
2-year U.S. Treasury bonds may decline.
10–30 year rates may rise due to inflation concerns.
Term spreads widen, and the curve steepens.
This is a typical signal of 'policy easing but rising uncertainty'.
③ Gold and commodities: All favorable.
If the independence of the Federal Reserve is questioned:
Gold will respond in advance.
Crude oil, copper, etc. are driven by demand expectations.
Bulk commodities are entering a cyclical rebound range.
Gold will especially benefit from:
Expectations for interest rate cuts + inflation concerns + risks of politicizing monetary policy.
This is the most sensitive signal for gold.
④ Foreign exchange: The dollar weakens, while emerging market assets strengthen.
If the dollar index weakens:
Capital outflow.
Yen and Euro benefit.
Emerging market stocks and bonds perform better.
⑤ The crypto market: The most direct 'liquidity barometer'.
The crypto market responds the fastest to liquidity changes.
If the market prices in future interest rate cuts:
BTC / ETH will lead the way.
Funds prefer high liquidity assets.
ETFs attracting more institutional allocations.
Mainstream coins are priced in advance.
Altcoins (SOL, AI, L2, RWA) will follow suit.
Liquidity diffusion sequence: BTC → ETH → Large-cap altcoins → MEME.
ETH's emotional response is particularly strong, as it is more sensitive to tech stocks.
In brief:
The more dovish the Federal Reserve Chair, the earlier the crypto market will rally.
Four, summary: The competition for the Federal Reserve Chair is a 'pre-priced competition' for global assets.
Whether Kevin Hassett takes office is not just an internal political struggle in the U.S., but also concerns:
Dollar liquidity direction for the next three years.
The valuation system of global capital markets.
Bond rate trends.
The weight switch between risk assets and safe-haven assets.
The upper edge of BTC/ETH's medium to long-term price.
The clearer his policy inclination, the more the market will act in advance.
If he takes office and leans towards interest rate cuts, global risk assets will welcome a liquidity repair window in the next quarter.
If the appointment faces significant resistance, market volatility will continue to rise, and assets will fluctuate repeatedly in the short term.
In any case, this personnel struggle has already become one of the most trackable variables in the global market going forward.
