Five Fed chair finalists — Hassett leads; all back near-term rate cuts
President Trump has narrowed the shortlist for Federal Reserve chair to five finalists: Kevin Hassett (NEC director), Governors Christopher Waller and Michelle Bowman, former Governor Kevin Warsh, and BlackRock’s Rick Rieder. Interviews are underway, coordinated by Scott Bessent, with a year-end choice expected ahead of Jerome Powell’s term expiry. Hassett is viewed as the frontrunner and explicitly favors faster, deeper cuts (he has supported a 50bp cut next month). All five candidates broadly favor cutting interest rates soon, citing a cooling labour market and other downside risks. Waller and Bowman — current Fed governors — have advocated earlier cuts; Bowman also emphasises regulatory rollbacks and stress-test transparency. Warsh attributes post‑pandemic inflation to fiscal and monetary excess, while Rieder warns of labour‑market softness despite corporate resilience. Markets have already priced in easier policy, lifting risk assets: traders should monitor interview developments, FOMC signals and timing/magnitude of potential cuts. For crypto traders, a Fed tilt toward faster rate relief raises the probability of greater liquidity, lower US interest rates and renewed upside for risk assets including BTC and ETH — but the exact path, inflation feedback and political constraints create key uncertainties.
Bullish
The shortlist of Fed chair finalists and reports that all five favor near‑term rate cuts increase the market probability of looser US monetary policy. Historically, lower US interest rates and easier Fed policy boost liquidity and risk appetite, supporting higher prices for major cryptocurrencies such as BTC and ETH. Short-term effects: heightened volatility around interviews, nomination timing and FOMC communications; risk-on flows can push spot and derivatives prices higher, and leverage-driven rallies are possible. Medium-to-long term: if a new chair enacts earlier and larger rate cuts, carry trades and institutional allocation to risk assets (including crypto) could expand, providing sustained tailwinds. Key risks that could limit upside include a rebound in inflation prompting policy reversal, political constraints on Fed independence, and shifts in risk sentiment from external shocks. Traders should therefore watch nomination developments, Fed policymakers’ language, CPI/employment datapoints and positioning metrics (funding rates, open interest) to manage entry, stop and leverage strategy.