Kevin Hassett warns that reappointing Jerome Powell to the Fed Board could delay or dilute Trump-era rate cuts, keeping crypto traders fixated on personnel-driven monetary policy.
Summary
- White House NEC Director Kevin Hassett warned that Jerome Powell’s reappointment to the Fed Board could sway the timing and depth of interest rate cuts.
- The Fed has held its benchmark rate at 3.5%-3.75% in Powell’s final meetings as chair, with markets split over how quickly incoming leadership will ease policy.
- Crypto traders now see Fed personnel politics as a key variable for Bitcoin, Ethereum, and broader digital asset liquidity.
White House National Economic Council Director Kevin Hassett said that Federal Reserve Chair Jerome Powell’s reappointment as a governor “may affect interest rate cut decisions,” injecting new uncertainty into the path of U.S. monetary easing. His comments land just as the Fed keeps its target rate in a 3.5%-3.75% band and as Powell chairs his final policy meetings before stepping down in mid-May.
In recent remarks relayed by U.S. media, Hassett has repeatedly argued that “there is ample opportunity to reduce rates in the upcoming months,” while also acknowledging that the composition of the Fed Board will shape how aggressively cuts are delivered. At Powell’s last meeting as chair, officials again voted to hold rates steady, with four members dissenting—the highest level of disagreement since 1992—underscoring a deeply divided Federal Open Market Committee (FOMC).
Why Powell’s seat matters for crypto
The friction is not just academic: Powell’s reappointment as a governor would keep a seasoned moderate on the Board at the same time President Donald Trump is set to install Kevin Warsh as the next Fed chair, a figure seen as more open to faster easing but constrained by inflation and politics. As Axios reported, Trump officials have recently “softened” their public pressure for immediate cuts, signaling they may “wait for new chairman Warsh and let him lead the next cycle,” a stance Hassett has echoed.
For crypto markets, this tug-of-war over the pace of cuts directly feeds into liquidity, risk appetite, and dollar strength. When the Fed cut rates in late 2025, Bitcoin (BTC) and Ethereum (ETH) both saw renewed inflows as lower real yields pushed investors out the risk curve, a pattern tracked across multiple crypto.news stories. With the federal funds rate still anchored at 3.5%-3.75% and no cuts yet in 2026, major tokens have traded in tighter ranges despite sporadic rallies in Bitcoin and Ethereum.
If Powell’s continued presence tilts the Board toward a slower easing path, that could cap near-term upside for high-beta assets like altcoins even as long-term crypto adoption remains intact. Prior crypto.news coverage of Fed transition risks in this story and of macro-driven sell-offs in another story has shown how quickly Bitcoin and DeFi tokens can reprice when rate expectations shift.
Traders are now closely watching communications from Hassett, Warsh, and Powell for clues on the first cut’s timing, with futures markets still pricing only modest reductions in 2026 despite Trump’s preference for “substantially lower” rates. Any surprise acceleration or delay in cuts—driven by Powell’s reappointment dynamics—will likely move not just Treasurys and equities, but also the entire digital asset complex.
