Trump’s Fed Chair Pick Will Decide Dollar’s Fate—Here’s Why It Matters

The dollar's next chapter hinges on a single presidential decision.

The Powell Replacement Play

Jerome Powell's potential exit from the Federal Reserve isn't just a personnel change—it's a monetary regime shift waiting to happen. The next chair will inherit the unenviable task of navigating post-pandemic inflation ghosts, a bloated balance sheet, and political pressure that makes central banking look more like performance art than policy.

Why Markets Are Watching

Currency traders aren't sleeping well. A dovish appointment could send the dollar tumbling as rate cuts get priced in, while a hawk could trigger a greenback surge that crushes emerging markets. The ripple effects would hit everything from your mortgage rate to the price of imported goods—because in global finance, everything's connected until it isn't.

The Digital Asset Angle

Here's where it gets interesting for crypto. A weakening dollar traditionally sends investors scrambling for hedges—and Bitcoin's looking awfully shiny lately. Meanwhile, any sign of monetary instability fuels the decentralization narrative faster than you can say "fiat debasement." It's almost as if the old system's fragility is crypto's best marketing campaign.

The Bottom Line

Whoever gets the nod will face a brutal choice: defend the dollar's reserve status or juice the economy ahead of the next election cycle. History suggests politicians prefer short-term sugar highs over long-term stability—after all, why make tough decisions today when you can kick the can and collect speaking fees tomorrow?

The dollar's future isn't written in economic textbooks. It's being decided in political backrooms—and the markets are about to render their verdict.

All eyes on Powell’s replacement

Right now, everything comes down to the Fed and who’s replacing Jerome Powell. His term as chairman ends in May.

Trump dropped hints recently that he’s picked someone but won’t say who yet. He’s also floated the idea of firing the current Fed leader before the term is up.

Kevin Hassett runs the National Economic Council. He’s been seen as the front-runner for a while now. Trump’s also talked about Kevin Warsh, who used to be a Fed governor. Then there are Fed governors Christopher Waller and Michelle Bowman. Rick Rieder from BlackRock is in the mix too.

Andrew Hazlett trades foreign currencies at Monex Inc. He explained, “Hassett WOULD be more or less priced in since he has been the frontrunner for some time now, but Warsh or Waller would likely not be as quick to cut, which would be better for the dollar.”

Fed officials split on next moves

Federal Reserve officials can’t seem to agree on when they’ll cut borrowing costs again. Most think more cuts could happen if inflation keeps cooling. But several officials want rates to stay where they are for a while. That came out in meeting records released Tuesday.

The minutes from the Fed’s December 9-10 session showed the disagreements aren’t going away as previously reported by Cryptopolitan. Most backed another rate cut last month, but it wasn’t an easy call for everyone.

The Fed voted 9-3 to trim its key rate by a quarter point in December. That’s three cuts in a row now. The rate is between 3.5% and 3.75%, as Cryptopolitan previously reported.

The minutes stated that “A few of those who supported lowering the policy rate at this meeting indicated that the decision was finely balanced or that they could have supported keeping the target range unchanged.”

Officials changed their statement after the meeting. The new version showed they’re less certain about when future cuts will happen. Their middle projection had just one quarter-point reduction coming in 2026. Individual forecasts were all over the place, though. Market watchers are putting their money on at least two cuts next year.

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