Former Fed Candidate Calls Fed Rate Cut ‘Almost Inevitable,’ Backs Kevin Hassett for Fed Chair
Former Fed Board of Governors candidate Judy Shelton said a Federal Reserve rate cut at next Wednesday’s meeting is “almost inevitable,” citing weak private-sector payrolls (32,000 job losses) and PCE inflation needing to align with expectations. Shelton argued high loan rates (8–12%) are constraining small businesses and justified a cut to support growth. She endorsed White House Economic Council Director Kevin Hassett as a strong candidate for Fed Chair, praising his supply-side economics views — lower taxes, lighter regulation, and policies to improve access to capital — and suggesting these could help lower inflation and boost growth toward 4%. Shelton also agreed with Hassett’s optimistic view that tax incentives and AI-driven efficiencies will spur demand, and she downplayed AI-related job concerns, noting foreign investment and new manufacturing will require workers. The comments underscore political support for a dovish Fed pivot and highlight risks to small businesses from elevated borrowing costs. (Main keywords: Fed rate cut, Kevin Hassett, Judy Shelton, PCE, job losses, small business loan rates.)
Neutral
The news is neutral for crypto markets. Shelton’s prediction of an imminent Fed rate cut and political support for Kevin Hassett signal potential easing in US monetary policy, which historically can be bullish for risk assets including cryptocurrencies because lower rates reduce the opportunity cost of holding non-yielding assets. However, her emphasis on weak private payrolls and persistent high small-business loan rates underscores underlying economic fragility that could limit risk-on flows. The endorsement of supply-side policies (tax cuts, deregulation) is pro-growth but politically charged and not a guaranteed near-term economic accelerator. Short-term impact: modest bullish bias if markets price in a rate cut and liquidity; expect volatility around the Fed meeting and PCE prints. Longer-term: mixed — easier policy supports higher asset valuations, but if growth weakens or inflation re-accelerates, the Fed may hesitate, producing choppy markets. Comparable past events: 2020–2021 easing led to strong crypto rallies, while late-2021/2022 hawkish shifts contributed to drawdowns. Traders should monitor Fed communications, PCE data, payrolls, and small-business credit conditions; use risk management around the Fed meeting.