Trump's Fed Overhaul: Crypto-Friendly Candidates in the Crosshairs

The U.S. Treasury Department has confirmed that interviews for a successor to Federal Reserve Chair Jerome Powell will commence after Labor Day, with 11 potential candidates under review. Treasury Secretary Scott Bessent emphasized that these contenders are "very strong" and highlighted the administration's goal to narrow the list to three or four finalists for President Donald Trump to consider by fall. The process is part of the Trump administration's broader strategy to realign the Federal Reserve with its economic agenda, which includes lowering interest rates and restoring institutional credibility. The current term of Jerome Powell as Fed Chair is set to expire in May 2026, and while the president cannot remove Powell over policy disagreements, the administration has signaled its intent to replace him when his term ends [1].

Among the 11 candidates, three have shown a favorable stance toward cryptocurrencies. These include Fed governor Christopher Waller, who recently voiced support for the integration of crypto into the financial system, and Fed vice supervision chair Michelle Bowman, who has encouraged staff to gain a "working understanding" of cryptocurrencies by allowing small investments in the assets. Rick Rieder of BlackRock, another contender, has also expressed positive views on Bitcoin, stating in 2024 that it could "be a big part of the asset allocation framework" and that "over time people become more and more comfortable with it." David Zervos of Jefferies, another shortlisted candidate, is associated with an investment bank that has backed several crypto-related firms, including eToro and Circle Internet Group [1].

The shortlist features a mix of current and former Fed officials, as well as prominent financial executives. These include Fed vice chair Philip Jefferson, who would become the first Black Federal Reserve Chair if selected, as well as Jefferies chief market strategist David Zervos and BlackRock's Rick Rieder. Other candidates include Fed governors and former officials like Kevin Hassett, Kevin Warsh, and James Bullard. Treasury Secretary Bessent noted that Trump "has a very open mind" but also "his own views" on monetary policy, emphasizing the need for a leader with expertise in both monetary and regulatory matters [2].

Tensions between the Trump administration and the Federal Reserve have been evident in recent months, particularly regarding interest rate policy. In July, the Fed held rates steady at 4.25–4.5% for the fifth consecutive meeting, despite dissent from two governors in favor of a rate cut. The decision caused a market sell-off before stabilizing. Trump has repeatedly criticized Powell for maintaining high borrowing costs, despite the administration’s imposition of tariffs and signs of slowing economic growth. Bessent stated that Trump believes the Fed has “lost its way” and needs leadership aligned with his priorities of reducing rates and reshaping regulation [3].

The market is closely watching the transition, as it could influence the direction of monetary policy in the coming months. Prediction platforms suggest an 80% chance of a rate cut in September, with traders pricing in an 81.9% probability of a reduction according to LSEG data. These expectations have risen sharply following Powell’s remarks at the Jackson Hole Economic Policy Symposium, where he indicated the Fed may need to shift its focus toward addressing risks to employment rather than inflation. While Powell’s tone signaled a potential policy pivot, some analysts and critics, including crypto investor Anthony Pompliano and Senator Elizabeth Warren, have warned against undermining the independence of the Federal Reserve [3].

Source: [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] Trump's Fed chair shortlist grows longer than expected (https://www.cryptopolitan.com/trumps-fed-chair-shortlist-grows-longer-than-expected/) [3] Jerome Powell's Fed Chair Replacement Imminent? PolyMarket Odds Skyrocket as Trump Team Weighs 11 Candidates (https://cryptorank.io/news/feed/5059b-powells-fed-chair-replacement-imminent-polymarket-odds-skyrocket-as-trump-team-weighs-11-candidates)