Economist Who May Succeed as Fed Chair: "Plenty of Room to Cut Interest Rates"

Source: PortaldoBitcoin Original Title: Likely Trump Nominee to Head Fed Says “There Is Plenty of Room” for Rate Cuts Original Link: https://portaldobitcoin.uol.com.br/provavel-indicado-por-trump-para-chefiar-fed-diz-que-existe-espaco-de-sobra-para-corte-de-juros/

Economist Likely to Succeed as Fed Chair: “Plenty of Room for Rate Cuts”

Kevin Hassett, the economist considered most likely to succeed as chair of the (Fed) Federal Reserve, said on Tuesday (9th) that there is “plenty of room” in the US economy for interest rate cuts. This position aligns with President Trump’s views, who has repeatedly voiced support for more flexible fiscal policy.

Hassett participated in an event organized by The Wall Street Journal, where he made it clear that under current US economic conditions, he would continue to push for rate cuts. “If the data show we can do that, then—as is the case right now—I believe there is considerable room to do so,” said the economist, who has served as an advisor to a compliance platform and is familiar with the cryptocurrency space.

Markets expect a 25-basis-point rate cut this Wednesday (10th). When asked whether there was room for a larger cut, Hassett simply replied, “Correct.”

The discussion with the economist also touched on another question: how would he respond if President Trump publicly pressured him to cut rates? “You just do the right thing,” Hassett answered.

He gave an example: if inflation were to rise from 2.5% to 4%, there would be no room for a cut. The potential future Fed leader emphasized that the president trusts his judgment and stated that he has a “strong commitment to being nonpartisan.”

Current Fed Chair Jerome Powell’s term ends in May next year. Trump has said the announcement of his pick for the position should come early next year. The candidate must then be approved by the Senate before taking over the agency that controls US monetary policy.

On December 2, Trump stated that the new Fed chair should be Hassett. Trump made this comment at a White House event: “I think we have a potential Fed chair here. Can we say that? Potential. He’s a respected man, I can tell you that. Thank you, Kevin.”

Trump has high hopes for a Fed chair who shares his vision for a low-interest-rate economy. In April this year, the US president criticized Fed (Fed) Chair Jerome Powell on his social media account, calling him “always late and wrong.” In the post, Trump criticized the central bank’s stance on interest rate policy and said Powell should have cut rates long ago.

Who is Kevin Hassett

Kevin Hassett is an economist who has worked at the Federal Reserve, is a fellow at the American Enterprise Institute, and has deep professional ties to the Republican Party. He served as an economic advisor to presidential candidates John McCain (1936-2018), Mitt Romney, and George W. Bush in his 2004 re-election. He was also one of Trump’s chief economic advisors during his first term.

The economist has disclosed owning the equivalent of $1,000,000 in a compliance platform’s stock and has served as an advisor to the company. Hassett also participated in the White House Digital Assets Working Group, which produced a policy paper on how the US cryptocurrency industry should be regulated.

Positive impact on the cryptocurrency industry

Higher interest rates make government bonds and other fixed income products more attractive, as their yields tend to rise with base rates. This usually reduces interest in riskier assets (such as stocks and cryptocurrencies).

On the other hand, lower interest rates make these conservative investments less appealing. As fixed-income returns decrease, investors begin to seek alternatives that can offer greater appreciation potential—including risk assets. This is why the cryptocurrency market closely monitors the Fed’s decisions: rate cuts can stimulate liquidity, improve risk appetite, and drive up the prices of Bitcoin and other blockchain-based assets.