Race for the Fed Chair: How Trump's Pick Could Make or Break Crypto's Next Bull Run

President Trump is expected to announce his pick for the next Federal Reserve Chair before Christmas, according to Treasury Secretary Janet Yellen. With Jerome Powell's term expiring in May 2026, the decision could reshape monetary policy for the next four years—and potentially determine whether crypto markets enter a sustained bull run or face prolonged consolidation.

Kevin Hassett, Trump's former economic advisor, has emerged as the frontrunner according to Bloomberg and prediction market Polymarket, where he holds over 50% odds. His dovish stance on interest rates and demonstrated support for crypto regulation marks him as the most favorable candidate for digital asset markets.

The stakes are high. The next Fed Chair will control the pace of rate cuts, shaping liquidity conditions for risk assets at a critical juncture. For crypto, which has suffered through two years of tight monetary policy, the difference between a dovish, crypto-friendly chair and a hawkish skeptic could be worth trillions in market capitalization.

The candidates and their crypto stance

Kevin Hassett: Frontrunner and crypto ally

Selection probability: 52% (Polymarket)

Monetary stance: Dovish

Crypto impact: Highly bullish

Hassett chairs Trump's National Economic Council and previously led the Council of Economic Advisers during the first Trump administration. He has publicly advocated for deeper and faster rate cuts, arguing current economic data supports more aggressive easing than Powell has pursued.

On crypto, his track record is clear. Hassett chaired the White House's digital asset working group that produced a comprehensive pro-crypto regulatory framework in July 2025. He views Bitcoin as a legitimate inflation hedge and has pushed for relaxed oversight of digital assets.

If appointed, Hassett would likely accelerate rate cuts while maintaining crypto-friendly regulation. The combination would create unprecedented tailwinds for digital assets.

Kevin Warsh: The hawkish alternative

Selection probability: 19% (Polymarket)

Monetary stance: Hawkish

Crypto impact: Bearish

Warsh, a former Fed Board member and Hoover Institution fellow, represents the opposite end of the spectrum. He has consistently favored tighter rates and aggressive balance sheet reduction, prioritizing inflation control over growth.

Higher rates under Warsh would suppress crypto valuations by increasing the opportunity cost of holding non-yielding assets like Bitcoin. Institutional capital would likely flow to safer, yield-bearing alternatives.

Warsh has also publicly supported developing a U.S. Central Bank Digital Currency (CBDC), which many crypto advocates view as competitive with permissionless cryptocurrencies. His appointment would mark the most challenging regulatory environment among all candidates.

Christopher Waller: The compromise pick

Selection probability: 22% (Polymarket)

Monetary stance: Moderately dovish

Crypto impact: Neutral

Waller, a current Fed Board member, occupies the middle ground. He supports gradual rate cuts calibrated to economic data rather than aggressive easing.

On digital assets, Waller has struck a pragmatic tone. He sees crypto as complementary to traditional payment systems and believes properly regulated stablecoins could enhance dollar dominance globally.

His measured approach would limit aggressive easing compared to Hassett, but his constructive stance on crypto makes him far preferable to hawkish alternatives. The rate trajectory under Waller would depend heavily on broader FOMC composition and incoming data.

Rick Rieder: The Wall Street insider

Selection probability: 2% (Polymarket)

Monetary stance: Moderately dovish

Crypto impact: Bullish

Rieder runs fixed income at BlackRock, controlling trillion-dollar allocations. His monetary stance emphasizes caution and flexibility once the Fed reaches neutral rates.

He has described Bitcoin as "21st-century gold," recognizing crypto's hedging value as traditional asset correlations converge. His Wall Street credibility could accelerate institutional capital flows into digital assets.

While a long shot for the position, Rieder's appointment would signal crypto has achieved full legitimacy in traditional finance circles.

Michelle Bowman: The inflation hawk

Selection probability: 1% (Polymarket)

Monetary stance: Very hawkish

Crypto impact: Very bearish

Bowman, a current Fed Board member, has been the lone dissenter in recent FOMC meetings, arguing against rate cuts. She has explicitly stated she wouldn't rule out additional rate hikes if inflation warrants.

Her appointment would force a painful recalibration for crypto markets currently pricing in a dovish pivot. She prioritizes inflation control even at the cost of slower growth, making her the least favorable candidate for risk assets.

Timeline: Two critical phases

The Fed Chair transition unfolds in two stages, each creating potential volatility for crypto markets.

Selection phase (now - late December 2024)

Trump's team is currently interviewing candidates. Treasury Secretary Yellen indicated a formal announcement will come before Christmas. If Hassett is confirmed as the nominee in mid-to-late December, crypto markets would likely rally as traders price in dovish, crypto-friendly leadership.

However, Polymarket shows a 32% chance Trump delays the announcement into early 2026, extending uncertainty.

Confirmation phase (January - April 2026)

After nomination, the candidate faces Senate approval. Initial hearings are expected in January-February 2026, with committee votes in March and a full Senate vote in April—roughly one month before Powell's term expires.

The four-month confirmation window creates multiple inflection points. Nominees will face questions on monetary policy philosophy, inflation targets, and potentially crypto regulation. Each hearing and vote could trigger volatility as markets digest new information and gauge approval likelihood.

What it means for crypto

Hassett currently leads the race, but prediction markets and asset prices haven't fully aligned. The gap suggests substantial upside if Trump confirms Hassett's nomination.

In the near term, a December announcement naming Hassett would likely trigger a holiday rally. The prospect of aggressive rate cuts combined with crypto-friendly regulation would mark the most favorable monetary environment since the Fed began tightening in 2022.

Longer term, the appointment determines crypto's trajectory through 2030. A Hassett-led Fed pursuing rate cuts could fuel a sustained bull market. A Warsh or Bowman-led Fed maintaining higher rates would likely force prolonged consolidation.

For crypto markets, this isn't just another political appointment. It's potentially the single most important variable shaping digital asset performance for the rest of the decade.