Trump’s Fed pick Kevin Hassett faces pushback over Fed independence concerns
White House economic adviser Kevin Hassett, once the frontrunner to replace Federal Reserve Chair Jerome Powell, is facing growing opposition from Trump advisers, lawmakers and market participants over concerns his close ties to President Trump could undermine Fed independence. Prediction market Kalshi shows Hassett’s odds falling from above 80% in early December to about 51%, while rival Kevin Warsh’s odds have risen to roughly 44% from about 11%. Sources say some insiders are promoting Warsh rather than openly attacking Hassett; high-profile figures such as JPMorgan’s Jamie Dimon are reportedly favorable to Warsh. Critics warn that a perceived politicization of the Fed could lead bond investors to demand higher long-term yields if they expect weaker anti-inflation action, increasing market volatility. Hassett has publicly defended Fed independence, saying Trump’s views would not determine rate votes without supporting data. For crypto traders: a contested Fed nomination that raises doubts about central bank independence can increase macro uncertainty, lift real yields and dollar strength, and heighten risk-off flows — factors that often pressure risk assets including major cryptocurrencies.
Bearish
The nomination dispute around Kevin Hassett increases political risk for Fed policy. Markets price central bank credibility; any perception that the Fed could be politically influenced tends to push long-term yields higher as bond investors demand a risk premium. Higher yields and a stronger dollar often trigger risk-off flows that hit speculative and high-beta assets first — including major cryptocurrencies. In the short term, news-driven uncertainty and potential bond-market repricing can spike volatility and cause abrupt crypto sell-offs. Over the medium to long term, sustained doubts about Fed independence could keep real yields elevated and dampen liquidity for risk assets, maintaining downward pressure on crypto prices. While the direct link between a single nomination and crypto performance is indirect, historical episodes show that elevated macro uncertainty and rising yields are typically negative for crypto, so the net impact is bearish.