Prediction markets Polymarket and Calci currently list Kevin Hassett, the director of President Donald Trump’s National Economic Council, as the frontrunner to replace Jerome Powell as the next Federal Reserve Chairman.
Hassett’s chances of filling the seat have jumped to 66% in Polymarket and 74% in Calci at the time of writing. Hassett is widely considered to be friendly to cryptocurrencies, thanks to his past role on Coinbase’s advisory board, his seven-figure stock publicly traded on the exchange, and his leadership of the White House’s Digital Assets Working Group.
Caitlin Long, founder and CEO of Wyoming-based Custodea Bank and a prominent advocate of crypto-friendly regulation, commented on X:
“If this happens and Mr. Hassett becomes Fed Chairman, it will finally mean the exit of the anti-crypto naysayers who still hold positions of power within the Fed (well, most of them, anyway). There will be major changes at the Fed.”
sauce: polymarket money
Related: Cryptocurrency-friendly Trump advisor Hassett is the frontrunner for Fed chair: Report
Kevin Hassett Crypto Credentials
Hassett, a longtime Republican policy economist who returned to Washington as an economic adviser to President Trump, has now emerged as the market’s top choice for the Fed.
His financial disclosures show at least a seven-figure sum in Coinbase stock and compensation for serving on the exchange’s academic and regulatory advisory committees, making him unusually close to the crypto industry for a Fed chair candidate.
Still, cryptocurrencies have come under fire in the past for reading too much into “ciphertext-savvy” resumes. Gary Gensler arrived at the Securities and Exchange Commission teaching MIT blockchain courses, but has gone on to preside over a series of high-profile enforcement actions that critics have dubbed “Operation Chokepoint 2.0.”
Hassett Fed may be more open to experimentation and less reflexively hostile to banks’ cryptocurrency activities. However, financial institutions’ mandate for financial stability means that markets should not assume unilateral bets on deregulation.
Related: Caitlin Long’s crypto bank loses appeal over Fed master account
Supervisory backlash within the Fed
Mr. Hassett’s odds have skyrocketed just as the Fed’s unique approach to banking supervision has faced pushback from veterans like Governor Michael Barr, who rose to fame as one of the key architects of Operation Chokepoint 2.0.
According to Caitlin Long, he “followed Warren’s orders while he was vice chair for oversight and regulation” and “made it clear that he opposed changes made by Trump and his appointees.”
On Nov. 18, the Federal Reserve announced new supervisory principles, moving examiners to a “risk first” framework and directing staff to focus on material safety and soundness risks rather than procedural and documentary issues.
In his speech today, Barr warned that regulators could be slow to respond to new risks by reducing oversight, weakening rating frameworks and making it harder to issue enforcement actions and sensitive matters, arguing that eliminating these tools would lead to a repeat of pre-crisis mistakes.
A few days later, the Fed clarified in Consumer Affairs Letter 25-1 that the new supervisory principles do not apply to the Consumer Affairs Oversight Program (an area under Governor Barber’s committee).
If market predictions are correct and the crypto-friendly Hassett takes over, his Fed will not be creating policy with a blank slate, but rather stepping into financial institutions that are already half-hearted about how much (and where) to rely on banks.
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