On the prediction market Polymarket, the probability of Hassett being elected as the new Federal Reserve Chairman has risen to 86%, far ahead of other potential candidates for the position.
If nothing unexpected happens, Kevin Hassett will be the next Federal Reserve Chairman, Trump's favorite.
The actions of the Federal Reserve have always been an important factor influencing the cryptocurrency market. So, if Hassett ultimately becomes the new Federal Reserve Chairman as the market expects, what impacts are anticipated 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 timing' because the government shutdown has already dragged down economic growth in the fourth quarter. He expects the government shutdown to lead to a 1.5 percentage point decline in fourth-quarter GDP. Meanwhile, he pointed out that the Consumer Price Index (CPI) in September showed that inflation performed better than expected.
Earlier, on November 13, Hasset indicated that the fourth-quarter GDP is expected to decline by 1.5% due to the government shutdown. There are not many reasons to expect no interest rate cuts.
Therefore, if Hasset becomes the new Federal Reserve Chairman, it is anticipated that he will push for quicker interest rate cuts, possibly lowering the federal funds rate to below 3%, and even close to 1%, to stimulate economic growth and employment.
This is also what Trump wants to see.
Restore QE
On December 1, the Federal Reserve officially ended its quantitative tightening (QT) policy, marking the conclusion of the balance sheet reduction process that began in 2022. Although some believe that the relevant effects may not manifest until early next year, expectations for liquidity easing have gradually been realized.
Hasset may be more tolerant of inflation, viewing the 2% inflation target as a flexible upper limit rather than a strict anchor. The focus is on employment and GDP growth, reducing reliance on data-dependent 'gradual' decision-making, and shifting to more proactive growth-friendly interventions.
In September of this year, Hasset stated in an interview with Fox Business that the U.S. is in a period of supply-side prosperity, where current interest rates are hindering economic growth and job creation in an economy without true inflation. He also mentioned that the U.S. is expected to achieve 4% GDP growth.
The view of prioritizing economic development over inflation control suggests that a resumption of QE under the leadership of Hasset at the Federal Reserve can be expected.
Impact on Bitcoin
Every candidate for the Federal Reserve Chair, whether or not they directly discuss cryptocurrency topics, will have a structural impact on the cryptocurrency industry. Hasset has a significant connection to the cryptocurrency sector; he has publicly held Coinbase stock worth millions and has served as a member of Coinbase's advisory board.
In addition, he has participated in the White House internal working group on digital asset policy, advocating for space for innovation within the regulatory framework, and believes that cryptographic technology is an important variable affecting the future economic structure. He has stated that Bitcoin will 'rewrite the financial rules.'
Hasset's cryptocurrency background may reduce regulatory uncertainty and drive institutions and the Federal Reserve to explore cryptocurrency integration. This could enhance the legitimacy and liquidity of Bitcoin, potentially pushing prices to new highs.
Many traders are optimistic about the market after Hasset takes office, believing that the bull market is just beginning, with expectations set for mid-next year, making the second half of 2026 a key period for the cryptocurrency industry.
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