Prediction Markets Put Kevin Hassett Front and Center for Fed Chair — Bullish for Risk Assets
Prediction markets now favor economist Kevin Hassett as the leading candidate to be nominated U.S. Federal Reserve chair, with implied probabilities rising into the mid-50% range and rivals such as Christopher Waller and Kevin Warsh trailing. Markets interpret a Hassett nomination as signaling a dovish Fed tilt and a higher likelihood of faster, deeper interest-rate cuts in 2025. That shift has already boosted risk appetite across assets, including equities and cryptocurrencies, and pushed traders to price lower long-term rates. Political context — including former President Donald Trump’s criticism of current Chair Jerome Powell and stated preference for a chair who favors sharp cuts — appears to be supporting these market moves. Market observers note the selection may narrow to a small shortlist with a possible year-end announcement, an event that could further reprice interest-rate expectations, bond yields and risk-assets. For crypto traders: a Hassett nomination would likely be interpreted as monetary easing that supports higher risk-on flows, increased liquidity, and potential near-term upside in major cryptocurrencies, while also increasing sensitivity to Fed-timing news and political developments.
Bullish
A Kevin Hassett nomination is widely interpreted as increasing the probability of an easier US monetary policy path (faster and deeper rate cuts). For cryptocurrencies this is typically bullish: lower policy rates and looser financial conditions tend to raise risk appetite, increase liquidity, and push investors toward higher-yielding or speculative assets such as BTC and ETH. Short-term effects: an announcement or rising odds can trigger immediate risk-on rallies and higher trading volumes in crypto as traders front-run easier policy. Volatility may spike around the nomination date and any Fed or political reactions. Medium-to-long term: sustained expectation of rate cuts supports higher asset valuations and leverage, benefitting crypto until inflation or policy reversals re-emerge. Risks and caveats: political uncertainty, a final nominee who is less dovish, or faster-than-expected economic shifts (e.g., inflation surprises) could quickly reverse sentiment. Traders should monitor prediction-market odds, Treasury yields, Fed communications, and political signals for timing and sizing positions.