Scott Bessent as Fed Chair: Right Replacement of Jerome Powell?

Could Scott Bessent Become Fed Chair? And What Would That Mean for Crypto Markets?

With Jerome Powell’s Federal Reserve term scheduled to conclude in May 2026, speculation has accelerated over who could succeed him as chair. One name now capturing attention is Scott Bessent, U.S. Treasury Secretary and a close economic ally to former President Donald Trump. Recent reports from Bloomberg and other outlets suggest Trump intends to name Powell’s replacement "very soon," causing ripples across political, financial, and cryptocurrency markets.

Why Bessent? Trump’s Preferred Candidate for a Market-Boosting Shift

The relationship between Powell and Trump has long been fraught. Trump has repeatedly criticized Powell’s interest rate policies—currently set between 4.25% and 4.5%—calling for reductions to spur growth and help the U.S. compete internationally. Powell, guarding the Fed’s independence, has maintained a data-driven approach, resisting political pressure.

Source: X

Enter Scott Bessent. Having been confirmed as Treasury Secretary in January 2025, Bessent has deep ties to Trump—serving as a top fundraiser and aligning with his trade and fiscal agenda. Trump insiders and economic advisors are reportedly backing Bessent for the Fed chair role, believing his appointment may usher in a more market-friendly era.

Bessent’s background is steeped in financial markets. A Harvard-trained economist and former hedge fund manager—heading the London office of Soros Fund Management—he was instrumental in major macro trades. Given his market acumen and pro-growth outlook, many see him as a candidate who might guide the Fed toward lower interest rates, reduce borrowing costs, and stimulate liquidity—conditions likely to benefit risk assets, including equities and cryptocurrencies.

Polymarket Odds and What They Reveal

One way public sentiment is reflected is Polymarket’s predictive market for the next Fed chair. As of June 9, 2025, the most popular outcome—at 47%—is that Trump will delay naming a successor until after December 31. Among named individuals:

• Kevin Warsh leads with approximately 28.5%

• Scott Bessent trails closely at 26%

• Other contenders like Kevin Hassett trail significantly behind at roughly 4%

These figures show how momentum is shifting toward Bessent, with public opinion increasingly factoring in his relationship with Trump.

Source: polymarket

What Would Bessent Mean for Crypto Markets?

For crypto enthusiasts, a Bessent-led Fed could be a promising development. Known for a crypto-friendly stance, Bessent has advocated:

• Clear regulation for stablecoins

• A cautious approach to a U.S. central bank digital currency (CBDC)

• Recognition of gold and cryptocurrencies as legitimate stores of value

Lower rates typically boost liquidity, encouraging capital to flow into alternative asset classes—including crypto. With Bessent in place, Bitcoin, Ethereum, and smaller altcoins like Pi could see renewed investment interest. His background in global macro suggests he may view digital assets as a diversification tool in uncertain macroeconomic environments.

Balancing Act: Independence vs. Influence

Despite the enthusiasm around Bessent, critics stress the importance of preserving the Fed’s independence. Appointing a Treasury Secretary directly tied to the president raises concerns about potential politicization of monetary policy.

The Financial Times highlighted the complexity of keeping Fed decisions free from political pressure. Analysts at Deutsche Bank warned any nominee must clearly demonstrate a commitment to fighting inflation and uphold the Fed’s dual mandate, regardless of political alignment.

Comments from notable figures, such as Senator Elizabeth Warren, underline the importance of institutional checks. They argue that democracy is best served when fiscal and monetary powers remain distinct.

Bessent’s Credentials and Potential Hurdles

Bessent’s resume is impressive:

• Ex–CIO at Soros Fund Management, delivering profitable macro trades

• Founder of Key Square Capital

• Adjunct professor at Yale; later worked in Washington as Treasury Secretary

He would also have the notable distinction of being the first openly gay Fed Chair, adding a historic component to his nomination.

Still, the path isn’t without challenges. The White House has already denied Bessent is a candidate, and he has yet to formally be interviewed. The Senate confirmation process will necessitate convincing lawmakers of his independence and expertise.

What Comes Next? A Timeline

Formal interviews have not yet begun, though Bessent and Trump have reportedly discussed Fed succession strategy. Bessent previously suggested naming a successor ahead of Powell’s term ending, creating "forward guidance" while Powell continues to serve. This unusual idea sparked debate among economists.

Any nominee, especially one so closely linked to Trump, will face intense scrutiny during the Senate confirmation process.

Market Implications and Investor Sentiment

Investors will be watching closely:

• Equities may rally with expectations of looser monetary policy

• Crypto could gain from enhanced liquidity and a favorable regulatory environment

• Bond markets might respond positively to rate cut expectations, though concerns about inflation could emerge if policy shifts aggressively

Analysts warn of market headwinds should the Fed appear to sacrifice its independence. Institutional investors view central bank credibility as essential for stable economic growth.

Conclusion: Crypto Gains, But Wildcards Abound

Scott Bessent’s emergence as a Fed chair nominee would mark a significant shift in U.S. monetary policy—one aligning with market-friendly, pro-growth principles. For cryptocurrency markets, this prospect is broadly seen as positive: lower rates, clearer regulations, and liquidity could all serve as catalysts for renewed interest.

But with political tensions high, the central bank’s independence under scrutiny, and formal processes still to unfold, much remains uncertain. Whether Bessent lands the role—or whether another stalwart like Kevin Warsh prevails—will have profound implications not only for interest rates but also for confidence in money, markets, and the emerging crypto frontier.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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