The competition for the position of the Federal Reserve's leader has entered a fever pitch, with two similarly named 'Kevin' facing off—one is the interest rate cut vanguard supported by Trump, while the other is the independent bigwig favored by Wall Street. This political and financial game directly controls the rise and fall of the crypto market, as the Federal Reserve's interest rate policy has always been the 'invisible hand' manipulating coin prices!
On the 12th local time, Trump dropped a bombshell in an interview: Kevin Hassett, Chairman of the White House National Economic Council, and former Federal Reserve Governor Kevin Warsh have both become core candidates. Even more explosive is his direct call for interest rates to drop to 1% or even lower, and he demands that the next leader negotiate with him on interest rates. This statement directly challenges decades of tradition regarding the Federal Reserve's independence, causing the market to erupt instantly!
Interestingly, Trump had previously hinted that the candidate was already determined, but now he has changed his tune, stating that the selection process is still ongoing. He just met with Waller on the 10th, and Waller's comment that borrowing costs should be lower struck a chord with him. As Trump's confidant for nearly a decade, Hasset was originally the frontrunner, with his odds skyrocketing to 56% on the prediction platform Polymarket. However, Wall Street collectively raised red flags; executives from bond institutions are worried that he will cater to Trump after taking office, using radical easing to undermine the Federal Reserve's independence. JPMorgan CEO Dimon has even directly sided with Waller, praising his philosophy and warning that compromising independence will lead to disaster.
In contrast, Waller, though recognized by Wall Street, has obvious shortcomings. After leaving the Federal Reserve, he frequently criticized his former employer, offending many insiders, and his stance is hawkish. Before the Lehman Brothers collapse in 2008, he was still stubbornly fighting inflation, which contradicted Trump's calls for rate cuts. More critically, the Federal Reserve has already split; just on Wednesday, after the largest rate cut in three years, three officials opposed it. The FOMC is in constant dispute over further easing, while Powell insists on waiting for data.
For the crypto world, this matter is crucial! Last time, when the Federal Reserve signaled a rate cut, BTC surged by 5% in a single day, and ETH and SOL rose by over 8%. Professor Hu Jie from Shanghai Jiao Tong University's Advanced Institute of Finance also mentioned that the FOMC has 12 voting members, and the leader only has 1 vote, making it difficult to make unilateral decisions. Even if Hasset takes office, decisions will still depend on data, but long-term compliance will weaken market trust.
Currently, the candidate list still hides a dark horse - the current board member Christopher Waller, who is supported by academia, the Federal Reserve, and Wall Street. Whether Trump will expand the candidate list next week remains unknown.
Are you betting on 'presidential confidant' Hasset or 'Wall Street darling' Waller to rise? If the 1% low-interest rate is realized, can Bitcoin reach its historical high?
