Trump's Hassett Pick for Fed Chair Tests Central Bank Independence

Trump's choice of Kevin Hassett as the next Federal Reserve Chair is gaining momentum, with the economist emerging as the frontrunner to succeed Jerome Powell, whose term ends in May 2026 according to reports. Hassett, currently director of the White House National Economic Council, has deep ties to cryptocurrency and aligns with the president's push for aggressive interest rate cuts, making him a strategic pick in a political climate where the Fed's independence is increasingly questioned as per analysis. His potential appointment would mark a significant shift in monetary policy and regulatory tone, particularly for digital assets.

Hassett's pro-crypto credentials are well-documented. He disclosed a stake in Coinbase valued at $1 million to $5 million and received $50,001 in compensation for serving on the exchange's Academic and Regulatory Advisory Council. The council includes other Trump-connected figures like former SEC Chair Jay Clayton, amplifying concerns about conflicts of interest as research shows. Additionally, Hassett oversaw the White House's digital asset working group, which published a report in July outlining crypto-friendly regulatory frameworks, including guidance on stablecoins and illicit finance. These actions position him as a candidate who could soften the Fed's stance toward digital assets while prioritizing rate reductions to stimulate economic growth.

The political stakes are high. Trump has repeatedly criticized Powell for not lowering rates faster, and Hassett's advocacy for cuts-evidenced by his praise for the Fed's September 25-basis-point reduction-aligns with the president's demands as reported.

However, the nomination is not guaranteed. While Trump's allies view Hassett as a loyal ally, the president's history of surprise decisions means the final choice could shift according to market analysis. Treasury Secretary Scott Bessent estimates a likely announcement before Christmas, though delays into early 2026 remain possible according to reports.

Market reactions have been mixed. Prediction platforms like Polymarket and Kalshi assign 52% and 55% odds, respectively, to Hassett's nomination, reflecting cautious optimism as per market data. Coinbase shares edged higher in after-hours trading following the news, though the stock closed lower, suggesting investor skepticism as reported. Analysts note that a Hassett-led Fed could boost crypto prices through lower interest rates, which historically correlate with increased risk appetite according to analysis.

The Senate confirmation process will test Hassett's qualifications and the Fed's perceived independence. While Trump's allies argue the central bank must align with administration goals, critics warn of politicizing monetary policy as research shows. Hassett, who has served in Trump's economic councils and as a Treasury policy consultant under Bush and Clinton, faces scrutiny over his crypto ties and potential conflicts according to reports.

If confirmed, Hassett's tenure could redefine the Fed's role in the digital economy. His report on crypto regulation, described as a potential "regulatory Bible" by industry lobbyists, may guide future policy according to analysis. However, the Fed's jurisdiction over securities remains limited, meaning direct crypto regulation will still fall to the SEC and CFTC according to regulatory guidance.

The broader implications for U.S. markets are profound. A dovish Fed under Hassett could ease dollar liquidity, lower borrowing costs, and spur investment in risk assets like equities and crypto. Yet, the appointment also raises questions about institutional integrity, as Trump's public pressure on the Fed risks eroding its nonpartisan reputation according to analysis.