Kevin Hassett is emerging as the next president of the Fed

Source: CritpoTendencia Original Title: Kevin Hassett is poised to be the next Fed president Original Link: In a context where tensions between the Federal Reserve (Fed) and the White House continue, U.S. President Donald Trump may make an announcement of enormous relevance. This concerns the public presentation of the administration's nominee to take over the central bank once Jerome Powell's term ends in May 2026.

According to recent reports, Donald Trump's advisors have a strong preference for Hassett. The Secretary of the Treasury himself, Scott Bessent, emphasized that the announcement of the selected candidate would be ready in the coming weeks, even before Christmas. In simple terms, the decision is practically made, although Donald Trump does not rule out considering new proposals.

The fact that a monetary easing enthusiast is at the helm of the U.S. central bank may have immediate effects on the markets.

This means that the high interest rate economy, which has lasted for years, could come to a swift end with an accelerated reduction in rates. The result could be an economic boom and a massive rally for the markets as a consequence of the reduction in the cost of borrowing.

Thus, the very announcement that Hassett is the candidate to replace Powell as chair of the Fed could trigger a strong bullish trend. This could be the driver of the “Santa Claus rally” of 2025 for cryptocurrencies. For now, Hassett is also emerging as the preferred choice for the position in prediction markets. 54% of bettors believe that Hassett will be the next chair of the Federal Reserve.

The new Fed chairman could cause greater problems

Just as Hassett's easing measures ( in the event of a Trump election ) can trigger an economic boom, they can also cause problems. The Federal Reserve has a mission known as the dual mandate, which consists of keeping unemployment low while also managing inflation.

To fulfill this mandate, it is necessary to maneuver carefully to maintain a delicate balance in the economy. These maneuvers do not go well with abrupt changes, which is why cuts and increases in rates are generally applied gradually, with movements of 25 basis points in most cases.

Thus, a radical cut can create an excessive flow of liquidity and lead to a surge in inflation in the economy. If we add the flow of fees to this, the economic rise could be accompanied by an increase in inflation rates, just as the stimuli of 2020-21 led to the largest price increase in 4 decades.

The other great danger of Hassett's eventual rise as president of the Fed is the loss of autonomy of the central bank. This creates a risk image for investments in the U.S., given that the Federal Reserve would be under government control, something that violates the principles of this institution, which dictate that it must operate under professional and not political decisions.

Whatever the scenario, 2026 is shaping up to be a year of intense dynamics for the economy and monetary policy.