Kevin Hassett warns that reappointing Jerome Powell to the Fed’s board could delay or reduce the effectiveness of Trump-era interest rate cuts and keep crypto traders fixated on personnel-driven monetary policy.
Kevin Hassett, chairman of the White House National Economic Council, said the reappointment of Federal Reserve Chairman Jerome Powell “could influence the decision to cut interest rates,” adding new uncertainty to the path of U.S. monetary easing. His comments came just as the Fed is keeping its target interest rate within a range of 3.5% to 3.75% and Powell is chairing his final policy meeting before leaving office in mid-May.
In recent remarks carried by U.S. media, Hassett reiterated that “there is ample opportunity to cut rates in the coming months,” but acknowledged that the composition of the Fed’s board will determine how aggressively the Fed cuts rates. In Mr. Powell’s last meeting as chairman, officials again voted to keep rates on hold, with four members dissenting, the highest level of disagreement since 1992 and highlighting the deep divisions at the Federal Open Market Committee.
Why Powell’s seat matters for cryptocurrencies
This friction is not just academic. While Mr. Powell’s reappointment will keep an experienced moderate on the board, President Donald Trump plans to install Kevin Warsh as the next Fed chairman, a man who is expected to be open to accelerating easing but subject to inflation and political constraints. As Axios reported, Trump officials have recently suggested they could “ease” public pressure for immediate cuts and “wait for a new chairman, Warsh, and let him lead the next cycle,” a position echoed by Hassett.
For the crypto market, this tug-of-war over the pace of rate cuts has direct implications for liquidity, risk appetite, and dollar strength. When the Fed cut interest rates in late 2025, both Bitcoin (BTC) and Ethereum (ETH) saw new inflows as lower real yields pushed investors off the risk curve, a pattern tracked in multiple crypto.news articles. With the federal funds rate still pegged at 3.5% to 3.75% and not expected to be lowered well into 2026, the major tokens are trading in a narrower range despite sporadic gains in Bitcoin and Ethereum.
If Powell’s continued presence tilts the board towards gradual easing, it could limit short-term upside for high-beta assets like altcoins, even if long-term crypto adoption remains intact. Previous crypto.news coverage of Fed transition risks in this article and macro-driven declines in another article shows how quickly Bitcoin and DeFi tokens can reprice when interest rate expectations change.
Traders are currently watching communications from Hassett, Warsh and Powell for clues as to when the first rate cut will occur, with futures markets still pricing in only a small rate cut in 2026, despite President Trump’s desire for “deeply lower” rates. Any unexpected acceleration or delay in cuts caused by the dynamics of Mr. Powell’s reappointment will likely move the entire digital asset complex, not just U.S. Treasuries and stocks.
