Trump's Crypto-Friendly Fed Gambit: A New Era for Digital Assets?

The Trump administration is narrowing down a list of potential candidates to succeed Federal Reserve Chair Jerome Powell, whose term is set to expire in May 2026. Treasury Secretary Scott Bessent has identified at least 11 individuals as strong contenders for the position, with the shortlisting process set to begin after Labor Day. Among these, at least three candidates are known for expressing a favorable stance toward cryptocurrencies, suggesting that the next Fed Chair might adopt a more open perspective on digital assets than the current administration under Powell [1].

The list includes a mix of current and former Fed officials, such as Dallas Fed President Lorie Logan, former St. Louis Fed President James Bullard, and Fed Vice Chair for Supervision Michelle Bowman. Additional names in consideration are BlackRock Chief Investment Officer Rick Rieder and Jefferies Chief Market Strategist David Zervos, both of whom have shown varying degrees of support for crypto assets [1]. Rieder has publicly acknowledged Bitcoin’s potential as a significant component of asset allocation, while Zervos’s firm, Jefferies, has been actively engaged with crypto-related ventures, including support for Bitcoin-focused strategies and stablecoin initiatives [1].

Chris Waller, a Fed governor, is another key figure on the shortlist. Waller has consistently advocated for rate cuts in the face of a cooling labor market and has expressed a cautious but open attitude toward crypto. He has argued that the Fed should not overly react to the inflationary impacts of tariffs and should instead focus on maintaining monetary policy independence. Michelle Bowman, the Fed’s top regulatory official, has also signaled a crypto-friendly approach, endorsing the idea that Fed staff should be allowed to invest in small amounts of digital assets to gain a practical understanding of the technology [1].

The potential appointment of a more crypto-friendly Fed Chair could have significant implications for the financial markets. Lower interest rates, a possible direction for the Fed under new leadership, could increase liquidity and spur investment in riskier assets such as cryptocurrencies. This contrasts with Powell’s more conservative approach, during which crypto was often treated with caution. While Powell has acknowledged the growing presence of crypto in financial markets, he has emphasized the need for prudence and oversight [1].

The selection process for the next Fed Chair is unfolding amid heightened scrutiny and political tensions. President Trump has publicly criticized Powell for not cutting rates and has hinted at the desire for a leader who can restore the Fed’s credibility and mission. Although Trump cannot directly replace Powell before May 2026, he has the authority to announce and recommend a successor early, which could influence market expectations and investor sentiment [1].

Analysts have noted that the political climate and Trump’s economic priorities may shape the Fed’s future direction. Mohamed El-Erian, an economic advisor at Allianz, has highlighted Rick Rieder and Kevin Warsh as two of the most qualified candidates, emphasizing their experience and strong understanding of market dynamics. The presence of experienced figures like Rieder and Waller on the shortlist suggests that the next Fed Chair will likely be a seasoned economist with a nuanced view of monetary policy and economic challenges [5].

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[1] Trump has 11 on his Fed chair list, 3 may be crypto-friendly (https://cointelegraph.com/news/trump-11-people-fed-chair-shortlist-some-crypto-ties)

[2] Bessent Says 11 'Strong' Candidates in Line to Replace ... (https://coingape.com/bessent-says-11-strong-candidates-could-replace-fed-chair-jerome-powell/)

[3] Two potential picks to replace Fed Chair Powell stand out (https://www.foxbusiness.com/economy/top-economist-says-two-contenders-replace-fed-chair-powell-stand-out)

[4] Bessent vets potential Powell successors; Trump's shortlist ... (https://www.foxbusiness.com/politics/bessent-vets-potential-powell-successors-trumps-shortlist-staring-take-shape)

[5] Why Powell's Jackson Hole Warning Could Reshape ... (https://coincentral.com/why-powells-jackson-hole-warning-could-reshape-crypto-markets-in-2026/)