Bessent flags ‘complicated’ Fed as key factor in chair pick

The Federal Reserve is poised to end its multi-year balance-sheet reduction, a shift that is beginning to influence discussions around Bitcoin and the broader cryptocurrency market. This transition marks a significant change in monetary policy, with analysts drawing parallels to previous instances when Quantitative Tightening (QT) was halted.

Kevin Hassett, a key advisor to former President Trump and a member of the president's crypto working group, has emerged as a leading candidate to chair the Federal Reserve, according to a Bloomberg report. This potential appointment highlights the intersection of cryptocurrency advocacy and traditional financial governance.

Bitcoin has found some relief as the odds of a Federal Reserve interest rate cut have surged, with recent market sentiment indicating a potential stabilization for the cryptocurrency. Analysts report that Bitcoin is climbing back towards $82,000, reflecting a decrease in selling pressure and increased optimism among investors.

Federal Reserve Governor Christopher Waller has expressed support for a potential interest rate cut in December, as the crypto market anticipates significant fluctuations in response to changing economic conditions. Current odds for a rate cut remain below 70%, but Waller's advocacy highlights concerns about the labor market, which aligns with the Fed's dual mandate of maximizing employment and stabilizing prices.

A senior Federal Reserve official has indicated that interest rate cuts may be on the agenda for the upcoming December meeting, potentially signaling a positive shift for the crypto market. This development has sparked optimism among investors, suggesting a possible rally in cryptocurrencies as traders anticipate a more favorable monetary policy environment.

A wave of significant U.S. inflation and jobs reports is expected this week, prompting traders to brace for potential volatility in stocks and cryptocurrencies as Federal Reserve policy expectations come into focus amid declining liquidity.