Four finalists for the Federal Reserve Chair: Bessant officially announced, the market has already been reacting in advance

U.S. Treasury Secretary Janet Yellen recently confirmed that the list of candidates for Federal Reserve Chair has been narrowed down to four, with Trump expressing full confidence in the Senate’s choice. This means the successor to current Chair Powell is about to be announced, and the policy inclinations of different candidates are profoundly influencing market expectations. From the stock market to crypto assets, the market has already begun pre-positioning for this power transfer.

The Final Four Officially Formed

According to the latest news, U.S. Treasury Secretary Janet Yellen stated that Trump has reduced the list of Federal Reserve Chair candidates to four. These candidates are:

• Michelle Bowman (Federal Reserve Governor)
• Kevin Hasset (White House Chief Economic Advisor)
• Kevin Waugh (Former Federal Reserve Governor)
• Rick Rieder

Yellen emphasized that Trump is committed to safeguarding the independence of the Federal Reserve and believes the Senate will be satisfied with any of these four candidates. This statement sends a key signal: the final choice is very close, and the decision is entirely in Trump’s hands.

Timeline: The Decision Is Imminent

According to related sources, Fed Chair Powell’s term will expire on May 15, 2026. Yellen revealed that the final decision on the new Fed Chair is expected to be announced around the Davos Forum, approximately around January 25. This means less than a week remains until the final answer.

The Market Has Already Started Reacting in Advance

On January 16, Trump suddenly stated at a White House event that he hopes Hasset will remain in his current position. This statement immediately shifted market expectations and triggered a chain reaction.

Sharp Fluctuations in Prediction Probabilities

According to data from prediction platform Kalshi, market expectations for each candidate have changed significantly:

Trump’s statement directly impacted market sentiment. The dollar index turned upward, U.S. stocks’ major indices tumbled collectively, and spot gold and silver experienced significant declines. This indicates that markets are extremely sensitive to changes in the Fed Chair selection.

Policy Inclinations of the Four Candidates Compared

Kevin Waugh: Crypto-Friendly but Hawkish

Waugh is currently the most favored candidate in the market, with a probability of 59%. He has stated that Bitcoin could be a sustainable store of value like gold, which has gained him some support in the crypto community. However, Waugh has maintained a neutral to hawkish stance on inflation for most of his career. Although he has shifted to a dovish position after Trump took office, hawkish traits still remain.

Kevin Hasset: The “Spokesperson” of the White House

As the White House Chief Economic Advisor, Hasset has always been an economic policy advisor close to Trump. Trump hopes he remains in his current role mainly because he worries that once in the Fed, Hasset might be constrained by institutional limits, causing the White House to lose an important economic policy “spokesperson.” This reflects Trump’s actual attitude toward the Fed’s independence.

Michelle Bowman: Advocate of Rate Cuts but Marginalized

Bowman has been a prominent advocate within the Fed for continuing rate cuts. She believes that under current economic risks, the Fed should not signal a pause in rate reductions. However, Yellen’s latest statement suggests that Bowman is most suitable to remain in her current position, which essentially excludes her from being a candidate for Chair.

Rick Rieder: The Least Market-Focused Candidate

There is relatively little information about Rieder, and he has the lowest market attention.

Potential Impact on the Crypto Market

Changes in Rate Cut Expectations

The choice of Fed Chair directly influences future monetary policy directions. If Waugh is ultimately elected, although crypto-friendly, his hawkish stance might mean a cautious approach to rate cuts. For the crypto market, this is a double-edged sword: hawkish policies could suppress liquidity, but might also prevent excessive inflation risks caused by overly loose policies.

Continuity of Trump Policies

Regardless of who is elected Fed Chair, there will be some need to coordinate with Trump administration’s economic policies. Trump has consistently exerted pressure on the Fed, and the new Chair will need to balance independence with policy alignment.

Differences in Crypto-Friendliness

According to relevant analyses, Waugh’s attitude toward cryptocurrencies is relatively open, which could be a long-term positive for the crypto market. However, in the short term, market uncertainty about the new Chair’s stance may continue to trigger volatility.

Summary

The list of candidates for Fed Chair has been narrowed to four, with the final decision expected around January 25. The market has already begun pre-reacting, fully pricing in the policy inclinations of different candidates. Waugh is currently favored, but uncertainties remain throughout the process. Whomever ultimately wins, the new Fed Chair will face a complex balancing act of easing versus fighting inflation, maintaining independence versus aligning with government policies. For the crypto market, key points are to observe the new Chair’s attitude toward digital assets and how their monetary policy framework affects liquidity.