Former U.S. President Donald Trump announced during a White House cabinet meeting on December 2 that he will likely unveil his pick for the next Federal Reserve Chair in early 2026, strongly hinting that Kevin Hassett, Director of the National Economic Council, is his top candidate.
Trump’s remarks triggered an immediate chain reaction. On the same day, the Bitcoin price surged over 5%, breaking past the $93,000 mark and fueling a robust rebound across the entire crypto market.
01 Policy Shift
Trump’s public statement signals a major shakeup in the leadership of the Federal Reserve. Current Chair Jerome Powell’s term ends in May 2026, and Trump has confirmed that Treasury Secretary Besant is not interested in taking the role.
Hassett, a longtime economic advisor to Trump, has played a direct role in shaping White House economic and trade policy. His office is located in the West Wing, keeping him in close contact with Trump.
During a subsequent event, Trump even pointed to Hassett and said, "I guess we have a potential Fed Chair here… I can tell you, he’s a highly respected individual."
02 Market Reaction
The market quickly picked up on this significant personnel signal. Traders in the interest rate futures market began betting heavily that the post-Powell Federal Reserve would pursue more aggressive rate cuts.
On December 3, the crypto market staged a broad rally. Bitcoin broke through $90,000, gaining over 5% in 24 hours; Ethereum also jumped 7%, reclaiming the $3,000 threshold.
Crypto-related stocks performed strongly as well, with Bitcoin mining companies and crypto concept stocks broadly rising. Market analysts noted that the absence of major negative news itself became a positive catalyst for the rebound.
03 Fed Status
The Federal Reserve is currently facing unprecedented internal policy divisions. The November rate meeting saw the first two-way dissent since 2019: Kansas City Fed President Schmid opposed rate cuts, while Fed Governor Milan advocated for deeper cuts.
At the latest meeting, Powell unusually stated that a December rate cut was "premature," emphasizing the committee’s "strongly divergent views." Such open acknowledgment of internal disagreement is rare in Fed history.
A government shutdown delayed the release of key employment reports, leaving policymakers without critical data to help bridge divisions between meetings, further increasing uncertainty in decision-making.
04 Underlying Factors
Market expectations for a shift in monetary policy are rooted in fundamental liquidity needs. Fundstrat co-founder Tom Lee noted that the end of quantitative tightening marks a fundamental shift in the liquidity environment.
Historical data shows that after the last round of quantitative tightening ended in September 2019, markets rebounded more than 17% in just three weeks. More liquidity typically means more capital flowing into risk assets like Bitcoin.
From a seasonal perspective, December has traditionally been a strong month for both U.S. equities and cryptocurrencies. Since 1950, the S&P 500 has averaged a gain of over 1% in December, making it the third-best month of the year for the index.
05 Investment Strategy
With both policy shifts and market rebounds presenting opportunities, choosing the right trading platform is crucial. According to CoinGecko data, Gate has climbed to fourth place among global derivatives exchanges with a 16% market share.
In the first quarter of 2025, Gate became the only centralized exchange among the top five to achieve double-digit growth, with perpetual contract open interest rising from 11% in October 2024 to 16% in 2025.
Gate’s differentiated strategy is evident in its coverage of niche token derivatives. The platform now offers nearly 600 contract trading pairs, almost all of which are first launches in the market.
06 Market Outlook
Looking ahead, investors should watch several key milestones: the delayed employment data to be released in mid-December, the December Fed rate decision, and Trump’s official nomination for Fed Chair in early 2026.
Currently, the market prices in a probability of over 87% for a rate cut at the December meeting, far higher than the mid-November level. Meanwhile, interest rate swap market pricing shows traders expect a cumulative rate cut of 85 basis points by the end of next year.
However, some analysts warn that the announcement of the new Fed Chair could create a "shadow Fed Chair" phenomenon, making it difficult for the Fed to clearly communicate monetary policy signals and potentially causing confusion when the market is seeking clear guidance.
Outlook
Bitcoin has reclaimed the $93,000 level, and Ethereum has broken past $3,000—this sudden crypto rally coincides with traders building large positions in the interest rate futures market, betting the Fed will accelerate rate cuts in the "post-Powell era."
With Trump openly hinting at Hassett as his nominee, the market appears to be pricing in a shift toward more accommodative monetary policy ahead of time. The contest over Fed leadership is just beginning, and the crypto market’s reaction is only the first ripple.
