Bitcoin News Today: Trump's Fed Picks Must Navigate Inflation, Bitcoin, and Global Turbulence

The Federal Reserve's leadership transition is gaining momentum as President-elect Donald Trump narrows the list of potential successors to Chair Jerome Powell, whose term ends in May 2026. Treasury Secretary Scott Bessent confirmed that Trump has shortlisted five candidates, including current Fed board members Michelle Bowman and Christopher Waller, former Fed governor Kevin Warsh, and private-sector figures like BlackRock's Rick Rieder, according to a Fast Company report. The selection process, expected to conclude by year-end, will face Senate confirmation in a Republican-controlled chamber, per a Mezha article.

Meanwhile, Powell remains focused on navigating the central bank's dual mandate amid economic uncertainties. His upcoming speech on Friday will likely address recent data, including October's 0.3% rise in core CPI inflation, which remains above the 2% target, according to a Moomoo preview. Market expectations lean toward a 25-basis-point rate cut at the December meeting, with the Fed's updated "dot plot" potentially signaling further easing in 2025, the preview noted. However, Powell has emphasized the need to balance inflation control with supporting employment, stating, "We're not following any pre-set path."

The Fed's policy calculus is further complicated by external pressures. Republican Sen. Cynthia Lummis has proposed a controversial plan to sell part of the Federal Reserve's gold reserves to purchase 1 million bitcoins, aiming to fund Trump's proposed cryptocurrency reserve without increasing the federal deficit, according to a Moomoo report. While Lummis argues the move would neutralize the Fed's balance sheet, critics like JPMorgan's Karen Ward warn that the bill's approval is unlikely, citing political and economic risks, as noted in a Moomoo analysis.

Separately, the Fed announced reforms to its bank stress tests, responding to a lawsuit from Wall Street groups. The updated process will publish models and scenarios for public feedback, aiming to reduce the burden on large banks while maintaining risk assessments, according to a CUToday report. The change, however, has sparked internal division, with Governor Michael Barr opposing the shift and warning it could undermine test credibility.

Global markets remain on edge as the Fed's decisions intersect with Trump's broader economic agenda. JPMorgan strategists predict the central bank may pause rate cuts in 2025 to assess the impact of Trump's policies, including proposed tariffs that could strain global growth. Bessent, meanwhile, has urged Japan to grant its central bank more flexibility to combat inflation, signaling potential clashes with Tokyo's current monetary stance, according to a Cryptopolitan report.

As the Fed chair search nears resolution, the chosen candidate will inherit a complex landscape: balancing inflationary pressures from Trump's fiscal policies, navigating global economic headwinds, and addressing growing calls for cryptocurrency integration. The outcome could shape monetary policy for years, with markets closely watching for signals on Trump's vision for the Fed's role in a post-Powell era.