Donald Trump is exploring the replacement of current Fed Chair Jerome Powell ahead of his term's expiration in May 2026. This decision may significantly shift U.S. monetary policy and global financial markets.
Trump Disrupts Fed's Traditional Schedule
Trump's early announcement regarding a potential successor to Powell diverges from customary practices. According to Polymarket data, there is only a 37% chance that no successor will be announced before December. This strategy is already turning Powell into a scapegoat whose decisions are losing credibility.
Major Candidates for Fed Chair
Currently, the candidates under consideration for the Fed chair position include:
- **Christopher Waller**, a sitting Fed board member, advocating for rate cuts. - **Kevin Walsh**, a former Morgan Stanley banker, who favors a more conservative approach without rate cuts amid high inflation. - **Scott Bessent**, presently serving as Treasury Secretary, known for his progressive proposals. - **Kevin Hassett**, director of the National Economic Council, also supporting a rate cut policy.
Impact of Lower Interest Rates on Bitcoin
Low interest rates and a weakening dollar have historically served as catalysts for bitcoin price increases. Attention is particularly drawn to the possible scenarios of Waller or Bessent taking the Fed chair position, which could lead to new highs for bitcoin. In contrast, Walsh's appointment could negatively impact the cryptocurrency market as his policies would strengthen traditional assets.
The significance of the next Fed chair appointment extends beyond the U.S., affecting global financial markets and monetary strategies of other nations.
