Top Fed Chair Candidate Hassett Sparks Market Divergence: Crypto Market Bullish, Bond Investors Warn of Risks

Kevin Hassett has emerged as a leading candidate to succeed Jerome Powell as Fed Chair in 2026, causing a clear divergence between Wall Street and the cryptocurrency market. According to reports, bond investors have privately expressed concerns to the U.S. Treasury, fearing that if Hassett were to become Fed Chair, he might push for rapid and politically influenced rate cuts, potentially threatening market stability.

According to the Financial Times, Wall Street banks, asset management firms, and the Treasury Borrowing Advisory Committee warned at their November meeting that Hassett might opt for rate cuts even if inflation remains above the 2% target. They pointed out that Hassett emphasized political issues during briefings, raising questions about whether he could maintain the central bank’s independence. Prediction markets show Hassett’s odds at around 75%, far ahead of competitors such as Waller and Walsh.

The cryptocurrency market, on the other hand, has made a completely different judgment. Traders generally view Hassett as a “dovish positive,” believing that if he takes office, the Fed may quickly ease policy, bringing more liquidity and weakening the dollar. Historically, such environments have typically supported the rise of crypto assets like Bitcoin and Ethereum. Hassett has previously served as an advisor to a compliant U.S. cryptocurrency exchange and holds over $1 million in COIN stock, further strengthening his reputation as “crypto-friendly.”

Bitwise strategist Juan Leon stated that if Hassett leads the Fed, it will be more inclined to support innovation and lower interest rates, potentially creating a more accommodative policy environment for digital assets.

Political dynamics are further intensifying market tensions. President Trump has recently hinted multiple times that he has already decided on his pick and may appoint Steven Mnuchin to a key economic advisory role. Bond investors worry that a hasty rate cut amid high fiscal deficits and still-elevated inflation could undermine the Fed’s credibility and trigger volatility in the bond market.

Powell’s term will end in May 2026, and the final nomination is expected to be announced early next year. As Hassett’s momentum grows, the market split is likely to continue, with the bond market seeking safe havens while the crypto market bets on potential policy easing and capital inflows.