Hassett’s Shock to the Fed: A Nuclear-Level Battle Over Independence and the Growth Mandate

When Trump “hinted” at Hassett as a potential Fed chair during a White House meeting, the market wasn’t simply digesting a personnel move—it was repricing the cornerstone of a 40-year global financial order: the Fed’s independence.

This isn’t just a “dovish replacement.” It could be a foundational logic revolution, shifting from “inflation stability” to “growth at all costs.”

Hassett’s Fatal Labels: From “Growth Above All” to “Politicized Rate Cuts”

Kevin Hassett is no traditional economist; he’s a staunch practitioner of Trump’s “growthism.” His three major policy tendencies are tearing at the market’s trust in the Fed:

1. Ultra-Dovish: No Bottom to Rate Cuts

Hassett has publicly stated multiple times that “rate cuts should happen now,” arguing that current rates are “a bit too high” and advocating a 100-basis-point cut by 2026. His core logic: “growth > all inflation risks”—in traders’ eyes, this spells potential destruction of dollar credibility.

More radically, he’s unsatisfied with conventional cuts. Markets fear he’ll push for 0.5%-1% jumbo cuts, even a premature restart of QE, turning the Fed back into a “money printer.”

2. Politicized Decision-Making: From Independence to “Obedience”

The market’s biggest fear is Hassett’s “zero distance” to Trump. As former NEC Director, he’s seen as the key figure to “bring Trump’s rate cut ideology into the Fed.” Insiders bluntly say Trump wants him there to “take control.”

This directly challenges the bottom line of Fed independence. Guosheng Securities analysts warn: If Hassett is appointed, markets will price in “loss of Fed independence,” with long-term inflation expectations and risk premiums rising together.

3. Track Record Worries: Overly Optimistic “Growth Fantasies”

During Trump’s term, Hassett repeatedly predicted economic growth would “double,” claimed tax cuts would “permanently boost the economy,” and grossly underestimated inflation risks. This “all good news, no bad news” approach worries Wall Street he’ll “ignore inflation for growth” if in power.

Market Pricing: A “Rate Cut Storm” Asset Repricing

The Hassett effect is already visible. The dollar dipped briefly when he was mentioned as a candidate, and prediction markets show his odds rising. Wall Street’s pricing logic is clear:

U.S. Treasuries: Highest volatility risk. If Hassett “insists on rate cuts regardless of inflation,” yields may plunge short-term, but surge long-term if inflation spirals, steepening the yield curve.

DXY Index: Major turning point. Ultra-aggressive cuts would weaken the dollar’s appeal; DXY may fall below 100, entering a long-term downtrend.

U.S. Equities: Tech stocks party first, then diverge. Liquidity bonanza pushes Nasdaq higher, but if inflation rebounds, valuation bubbles will face severe compression.

Gold & BTC: Super bullish. Gold will benefit from falling real rates; Bitcoin may see forced institutional inflows on “money printing pumps the price” logic. Hassett holds $1M-$5M in Coinbase stock, signaling an open attitude toward crypto.

Altcoins: Broad rally first, then differentiation. In a liquidity flood, everything flies, but only fundamentally strong projects survive when the tide recedes.

D.C. Insider: Why Is Treasury “Quietly Surveying”?

Bloomberg reports Treasury is reaching out one-on-one to Wall Street figures, seeking opinions on Hassett’s appointment. Market participants express concern, calling the candidate pool “extremely narrow” and Hassett’s “strong entry” notable.

This sends a key signal: Even Treasury knows this appointment could alter the global financial structure. Fed Governor Kugler’s unexpected resignation gave Trump a chance to fill a vacancy early. If Powell doesn’t voluntarily step down, Trump won’t get another pick before 2028.

Wall Street is making a last-ditch effort to block Hassett. Main worries: political interference shaking central bank independence, aggressive cuts in a sticky inflation environment triggering bond sell-offs, and long-term rate hikes stifling growth.

Biggest Risk: Not Easing, But “Collapse of Trust”

The market’s fear of Hassett isn’t just about rate cuts. The real risks are:

1. Inflation Out of Control: If the Fed becomes a “political tool” and forces cuts amid sticky inflation, it could reignite inflationary flames. The market would be forced to reprice “stagflation” risk, and risk assets would face violent policy reversals.

2. Fed Credibility Bankruptcy: If markets see monetary policy as hijacked by politics, trust in the Fed will be fundamentally damaged. Treasuries’ “safe haven” role could fail, global central banks might reduce USD holdings, creating a vicious cycle.

3. Structural Imbalances: Renmin University of China researchers point out that if Hassett “breaks with the Fed’s past” and prioritizes growth over price stability, Treasuries could become the “place where failure begins.” Long term, this could accelerate global “de-dollarization.”

Special Considerations for Crypto: Both Opportunity and Risk

For crypto, Hassett’s appointment is a classic “double-edged sword”:

Short-term Narrative Driver: Dovish chair + crypto holdings background will amplify the “institutions entering” narrative. Market expectations will shift from “preventive cuts” to “stimulus cuts,” possibly triggering a “Christmas rally.”

Long-Term Structural Risks: If the dollar system is shaken by politicization, Bitcoin’s “digital gold” narrative gets stronger. But if inflation forces a sudden Fed policy reversal, crypto will experience a “roller coaster” ride.

Crucially, Hassett’s crypto stance could be conflicted by personal interest. His Coinbase stock worth as much as $1M could affect his regulatory judgments—or become a target for political opponents.

Investor Response: Building Anti-Fragile Portfolios Amid a “Rate Cut Storm”

In the face of potential policy upheaval, investors should stop predicting and focus on preparing:

1. Hedge Dollar Risk: If Hassett is appointed, DXY downside risk rises. Consider gold, Bitcoin, and other anti-devaluation assets, but keep allocations below 20%.

2. Watch Rate-Sensitive Assets: Long-term Treasuries may rally early on aggressive cuts, but will crash if inflation expectations rise. Favor short-term Treasuries or floating-rate notes.

3. Manage Crypto Positions: BTC may benefit from liquidity deluge, but beware of sudden policy reversals. Build positions in the $85,000–$90,000 range in batches—avoid going all-in at once.

4. Monitor Policy Signals: The December 19 BOJ decision and Trump’s formal nomination timing will determine near-term direction. In the 48 hours before/after major policy announcements, reduce trading to avoid liquidity traps.

Conclusion: A Game With No Winners

Hassett’s potential appointment marks the Fed’s shift from “independent regulator” to “political tool.” It’s a victory for the White House, but the start of a trust crisis for markets.

As Wall Street warns: “We aren’t afraid of rate cuts; we’re afraid of unlimited, politicized, and radical cuts.” If the Fed loses its independence, after a short-term risk asset party, the market faces more violent shocks and greater uncertainty ahead.

For crypto, Hassett could be the harbinger of “the best of times” (unlimited liquidity) or “the worst of times” (violent policy reversal after runaway inflation).

The only certainty: In this game, there are no winners—only survivors. #美联储独立性 #哈塞特 #加密货币 #降息预期 #Trump

Risk Warning: Fed personnel changes are uncertain and market volatility is high. Please carefully assess policy risks and manage positions prudently. $BTC ‌$ETH ‌$SOL ‌