Trump’s Bid to Recast Fed Policy: Why Kevin Hassett’s Rise Would Shift Monetary Power — and What It Means for Crypto

Kevin Hassett, the White House economic adviser and director of the National Economic Council, has emerged as the first pick of Donald Trump to replace Jerome Powell as chair of the Federal Reserve. This new candidate signals more than just a personnel change, but Trump's effort to take control over the FED to steer the country's monetary policies closer to the White House preferences.

The strategic logic behind a Hassett pick is straightforward. Trump has made no secret of his desire to assert greater control over the Fed’s policy direction, and Hassett is seen as politically aligned and intellectually predisposed toward aggressive rate relief.

Market commentators and policy analysts have been quick to weigh in on why Hassett tops Trump’s shortlist. John Authers, the veteran markets editor and Bloomberg Opinion columnist, framed the selection as one grounded in loyalty. Authers wrote that nominating Hassett “appears to be about loyalty,” suggesting Trump prefers a chair he trusts to execute administration priorities rather than an independent technocrat.

"Trump regards nominating Jerome Powell eight years ago as a big mistake. Waller, Warsh and Rieder all in different ways might establish themselves as independent from the administration."

George Pollack, a senior U.S. policy analyst at Signum Global Advisors, gave a similarly blunt read: Trump will likely nominate Hassett “because of his confidence that Hassett will be the candidate most likely to support the administration’s priorities.”

Those assessments feed a broader narrative: this pick is not just about monetary philosophy, it is about control. In markets, perception matters. If investors believe the Fed will prioritize political objectives over macroprudential data, asset prices and expectations will adjust accordingly — fast.

Trump Tries To Boot Lisa Cook From Her Seat

Observers explained that Trump's intentions to exert control over the country's financial policies was already very evident after Trump's attempt to fire the Federal Reserve Governor Lisa Cook.

The White House attempted to oust Cook resulted in a court fight and a contested public debate about the limits of presidential authority over the Fed. In a court filling, Cook's lawyer, Abbe Lowell, called the attempt a “broadside attack on the century-old independence of the Federal Reserve System,” arguing the gambit was an explicit signal that the administration is willing to test institutional boundaries to achieve policy aims.

The Cook episode demonstrates the stakes. If the White House can successfully reshape the Fed’s leadership and lower its institutional resistance to political pressure, the effects will ripple through interest rates, inflation expectations, and the dollar — with consequences for every corner of financial markets.

A Fed that succumbs to political direction in favor of prematurely shallow rates would likely deliver short-term gains but longer-term pain. In the near term, lower rates can buoy stocks, credit, and crypto prices — creating headlines and apparent economic momentum. Over time, however, under-priced credit risks, higher inflation, and destabilized expectations about central bank independence could undermine the U.S. economy’s credibility.

Central bank independence has been a global public-good for decades: it anchors inflation expectations, stabilizes currency value, and reassures international investors that policy is data-driven rather than election-driven.

If markets begin to doubt the Fed’s commitment to objective, evidence-based decision-making, yields could reprice aggressively, risk premia would rise, and the United States might face higher borrowing costs down the line. In short, the political payoff of engineered rate cuts can quickly become an economic liability — a point many analysts warn is not merely theoretical but historically grounded.

What a Hassett Fed Would Mean for Crypto

Hassett’s résumé blends academic credibility with inside-the-beltway experience. He taught at Columbia Business School, worked as an economist at the Federal Reserve Board of Governors, and served at the Treasury across multiple administrations.

More recently he led the NEC’s digital-asset working group and disclosed a sizable stake in Coinbase, a fact that has helped shape his reputation as relatively crypto-friendly. For investors and crypto firms, a Hassett Fed could translate into easier financial conditions — and a friendlier regulatory temperature — in the near term.

For the crypto sector, Hassett’s elevation would carry immediate upside and nuanced longer-term risk. In the short run, his dovish tilt and familiarity with the digital-asset debate — including disclosed financial ties to Coinbase and stewardship of the White House digital asset working group — would likely be received as bullish by traders. Lower interest rates tend to make risk assets more attractive, and crypto has historically benefited from looser monetary conditions.

But the longer run is more complicated. A Fed that is perceived as politicized and willing to keep rates too low for political ends risks stoking higher inflation and market volatility — environments that can ultimately harm institutional adoption and regulatory stability.

Moreover, a central bank seen as subordinate to political impulses may provoke tougher regulatory countermeasures elsewhere, as lawmakers and watchdogs scramble to rebalance oversight. For crypto firms that prize stable, predictable regulation, such uncertainty could be counterproductive.

Kevin Hassett’s reported front-runner status is a political statement as much as a personnel choice: it signals the Trump administration’s clear intent to steer U.S. monetary policy toward a more dovish, administration-friendly posture.

Commentators like John Authers and analysts such as George Pollack interpret the move through the same lens — loyalty and alignment over technocratic independence. The Lisa Cook episode offers a recent precedent showing the administration’s willingness to challenge that independence.

A Hassett Fed could deliver short-term windfalls for risk assets, including crypto, but the broader economic trade-offs are significant. Politicizing the Fed risks higher inflation, weaker policy credibility, and greater market instability over time.

For the crypto industry, the immediate signal may be favourable; for the economy as a whole, the long-term cost could outweigh the political benefits — a calculation that markets will watch closely if a Hassett nomination goes ahead.