The Possibility of a Frenzied Bull Market with the New Fed Chair
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The Possibility of a Frenzied Bull Market with the New Fed Chair
Barring any surprises, Kevin Hassett will be the next Federal Reserve Chair, Trump's favorite.
Navigating Web3 tides with focused insightsAuthor: Cookie,律动
On the prediction market Polymarket, Kevin Hassett's odds of becoming the next Federal Reserve chair have risen to 86%, far ahead of other potential candidates.
Barring any surprises, Kevin Hassett will be the next Fed chair—the clear favorite of Trump.
The Fed's moves have always been a key factor influencing the cryptocurrency market. So, if Hassett becomes the new Fed chair as expected, what impact might this have on markets?
Accelerated Rate Cuts
In late November, Hassett stated that pausing rate cuts at this time would be a "terrible timing," as the government shutdown has already dragged down economic growth in Q4. He estimated the shutdown would reduce fourth-quarter GDP by 1.5 percentage points. At the same time, he noted that September’s CPI data showed inflation performing better than expected.
Earlier, on November 13, Hassett said he expected Q4 GDP to drop by 1.5% due to the shutdown, and saw little justification for holding rates steady.
Therefore, if Hassett becomes the next Fed chair, he is likely to push for faster interest rate reductions, potentially lowering the federal funds rate below 3%, even approaching 1%, to stimulate economic growth and employment.
This is exactly what Trump wants to see.
Resumption of 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 argue the full effects may not materialize until early next year, expectations of liquidity easing are gradually being realized.
Hassett may adopt a more tolerant stance toward inflation, treating the 2% target as a flexible upper bound rather than a strict anchor. His focus would shift toward employment and GDP growth, moving away from data-dependent "gradualism" toward more proactive, growth-oriented interventions.
In September, during an interview with Fox Business, Hassett said the U.S. is experiencing a supply-side boom, and in an economy without real inflation, current interest rates are hindering growth and job creation. He also expressed confidence that the U.S. could achieve 4% GDP growth.
Given his prioritization of economic expansion over inflation control, a return to QE under Hassett’s leadership is a plausible expectation.
Impact on Bitcoin
Every Federal Reserve chair candidate, regardless of whether they directly discuss crypto, will exert structural influence on the cryptocurrency industry. Hassett, in particular, has notable ties to the crypto sector—not only has he publicly held $1 million worth of Coinbase stock, but he also served on Coinbase’s advisory board.
Additionally, he participated in a White House working group on digital asset policy, advocating for space for innovation within regulatory frameworks, and has described crypto technology as a key variable shaping future economic structures. He once stated that Bitcoin will "rewrite the rules of finance."
Hassett’s background in crypto could reduce regulatory uncertainty, encourage institutional adoption, and prompt the Fed to explore cryptocurrency integration. This could enhance Bitcoin’s legitimacy and liquidity, potentially driving prices to new highs.
Many traders are optimistic about the market outlook following Hassett’s expected appointment, believing that a bull market will truly begin once he takes office—likely around mid-next year—making the second half of 2026 critically important for the crypto industry.
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