Prediction markets are increasingly signaling that Kevin Hassett, an economist with ties to Coinbase, is a leading candidate to become the next Chair of the Federal Reserve. With current Chair Jerome Powell's term ending in May 2026, and President Trump reportedly conducting final interviews through Treasury Secretary Scott Beson, Hassett's name has emerged as a strong possibility.
Prediction market data on Polymarket indicates Hassett's probability of being nominated has risen to 52%. This heightened speculation has already impacted the market, with the U.S. 10-year Treasury yield dipping below 4% in late November after Bloomberg reported Hassett as a top contender. This decline, the first in a month, reflects investors' anticipation of potential aggressive rate cuts under Hassett's leadership.
Hassett's connection to the cryptocurrency industry is a significant factor in his candidacy. He has publicly disclosed holding over $1 million in Coinbase stock and has served on the exchange platform's advisory board. This background sets him apart from other potential candidates and has led the crypto community to view him as a potentially favorable choice for the industry.
His potential appointment could usher in unprecedented support for crypto at the Fed, potentially influencing digital asset regulation and central bank digital currency (CBDC) policies. He has also been involved in White House internal working groups on digital asset policy, advocating for preserving space for innovation in regulatory frameworks and viewing crypto technology as a key variable shaping the future economic structure.
Hassett's economic views lean towards more dovish monetary policy, openly supporting faster rate cuts and a return to more accessible lending. This stance contrasts with some of the current Fed leadership who prioritize price stability, and suggests a potential shift in the central bank's approach. For traditional markets, this could imply a weaker dollar, while for risk assets like cryptocurrencies, it could mean additional breathing room.
However, some analysts suggest that Hassett's connection to Coinbase could also draw scrutiny from regulators seeking to demonstrate strict oversight, potentially creating short-term market volatility. The crypto market might experience mixed signals initially, as Hassett's advocacy for rate cuts contrasts with Powell's cautious approach to inflation. This could lead to traders initially favoring safer assets like government bonds until a clear direction from the Fed emerges.
Other potential Fed Chair candidates include Christopher Waller, a current member of the Federal Reserve Board of Governors. Waller represents a more "hawkish" approach, prioritizing price stability and potentially leading to slower rate cuts and minimal experimentation in financial regulation.
Ultimately, the appointment of the next Fed Chair could significantly influence the crypto market in 2025, impacting everything from interest rate dynamics to the oversight of exchanges and stablecoins. Investors are closely monitoring the contenders, political signals from Washington, and any comments from the White House or the Board of Governors. The decision could mark a shift towards a more open approach to innovation within the U.S. financial infrastructure or a continuation of the conservative status quo.
