Prediction Markets Favor Hassett for Fed Chair: Crypto's Potential Game Changer?

Prediction Markets Favor Hassett for Fed Chair

Prediction markets like Polymarket and Kalshi are currently placing Kevin Hassett, former National Economic Council director under President Donald Trump, as the frontrunner to succeed Jerome Powell as the next Federal Reserve chair. At the time of writing, the odds of Hassett filling the seat have surged to 66% on Polymarket and 74% on Kalshi.

Hassett is widely regarded as crypto-friendly, stemming from his prior role on Coinbase's advisory council, a disclosed seven-figure stake in the exchange, and his leadership of the White House digital asset working group.

Caitlin Long, Founder and CEO of Wyoming-based Custodia Bank and a prominent advocate for crypto-friendly regulations, commented on X: "If this comes true & Hassett does become Fed chairman, anti-#crypto people at the Fed who still hold positions of power will finally be out (well, most of them anyway). BIG changes will be coming to the Fed."

Kevin Hassett's Crypto Credentials

Hassett is a seasoned Republican policy economist who returned to Washington as Trump's top economic advisor and has now emerged as the market-implied frontrunner to lead the Fed. His financial disclosure reveals at least a seven-figure Coinbase stake and compensation for serving on the exchange's Academic and Regulatory Advisory Council, positioning him unusually close to the crypto industry for a potential Fed chair.

However, the crypto community has been disappointed before by overinterpreting "crypto-literate" résumés. Gary Gensler arrived at the Securities and Exchange Commission with MIT blockchain credentials but subsequently oversaw a series of enforcement actions that critics labeled "Operation Chokepoint 2.0."

A Hassett-led Fed might exhibit a greater openness to experimentation and a reduced reflex hostility towards bank-crypto activity. Nonetheless, the institution's mandate concerning financial stability dictates that markets should not anticipate a guaranteed path toward deregulation.

Supervisory Pushback Inside the Fed

The spike in Hassett's odds coincides with pushback against the Fed's supervisory approach to banks from figures like Governor Michael Barr, known as a key architect of "Operation Chokepoint 2.0." According to Caitlin Long, "While he was Vice Chairman of Supervision & Regulation he did Warren's bidding," and he "has made it clear he will oppose changes made by Trump & his appointees."

On November 18, the Fed released new Supervisory Operating Principles, shifting examiners towards a "risk-first" framework, emphasizing material safety and soundness risks over procedural or documentation issues. In a speech the same day, Governor Barr warned that narrowing oversight, weakening ratings frameworks, and complicating enforcement actions could slow down supervisors' response to emerging risks, arguing that undermining these tools would echo pre-crisis errors.

Days later, in Consumer Affairs Letter 25-1, the Fed clarified that these new Supervisory Operating Principles do not extend to its Consumer Affairs supervision program (an area overseen by Barr as a governor).

Should prediction markets prove accurate and Hassett, with his crypto-friendly background, inherit this landscape, his Fed would not operate on a clean slate. Instead, it would enter an institution already undergoing a shift in its approach to bank oversight.