Federal Reserve Chair frontrunner and White House National Economic Council Director Kevin Hassett publicly stated in a televised interview that the Fed still has ample room to cut rates. His remarks echoed those of Chicago Fed President Austan Goolsbee, who acknowledged that after reviewing recent inflation data, he may support further rate cuts.
On the same day Hassett made these comments, the crypto market was quick to react. The Bitcoin price surged past $89,000, gaining over 1.2% on the day. According to Gate market data, ETH/USDT price stood at $3,038.98.
01 Policy at a Turning Point
The Federal Reserve’s monetary policy stands at a historic crossroads. Kevin Hassett, Director of the White House National Economic Council and a strong contender to become the next Fed Chair, recently made clear his support for continued monetary easing.
Hassett pointed out that the three-month moving average of U.S. core inflation has dropped to 1.6%, consistently below the Fed’s 2% inflation target.
He’s not alone in this view. Chicago Fed President Austan Goolsbee also admitted that, after examining recent inflation data, he may back additional rate cuts in the future. This "dovish" alignment from both the White House and within the Fed has fueled strong market expectations for further easing.
02 Diverging Market Views
Despite growing calls for rate cuts, there are significant differences within the Fed and the market regarding the path ahead.
At the December policy meeting, the Fed delivered a widely expected 25 basis point rate cut. However, for the first time since 2019, three dissenting votes emerged, highlighting internal divisions.
The dot plot shows that Fed officials’ median forecast for 2026 includes only one rate cut. Yet, several analysts—including Wen Bin, Chief Economist at Minsheng Bank—believe that with a potentially more dovish new Chair, the actual pace of rate cuts may exceed official projections.
According to the latest CME "FedWatch" tool data, market confidence in near-term rate cuts has weakened. Traders now see just a 21% chance of a rate cut in January 2026, while the probability of a cumulative 25 basis point cut by March has risen to 47.1%.
03 The Capital Wave
Global capital is reacting sharply to expectations of a shift in monetary policy. In traditional financial markets, easing expectations typically show up first in safe-haven assets like gold.
Following Hassett’s remarks, spot gold prices spiked sharply. Experts note that ongoing gold purchases by central banks worldwide have disrupted the usual supply-demand balance, and a dovish turn in Fed policy is expected to further benefit gold.
Meanwhile, Bitcoin—often called "digital gold"—has shown even greater volatility and resilience. On December 22, Bitcoin broke above the $89,000 threshold. Leading cryptocurrency Ethereum (ETH) has been fluctuating around the $3,000 mark.
04 Trading Opportunities
In times of heightened macro policy uncertainty, choosing a reliable and responsive trading platform becomes essential. As a global leader in cryptocurrency trading, Gate continues to serve over 47 million users worldwide with services that meet international standards while addressing local needs through its "Glocal" (global + local) strategy.
By establishing operational centers in key regions such as Hong Kong, Bangkok, and Dubai, Gate ensures it can quickly adapt to changes across various markets. This combination of global reach and local insight enables traders to seize opportunities arising from macro events like Fed policy shifts more effectively.
For traders monitoring the impact of Fed interest rate policy, the Gate platform offers real-time market data, a wide range of trading pairs, and up-to-the-minute market news. During sensitive periods of monetary policy transition, these tools and services are critical for making informed decisions.
A New Chapter in Market Narratives
From public statements by White House advisors to capital flows in the market, a sweeping narrative centered on the Fed’s interest rate policy is unfolding. Hassett’s comments not only reveal Washington’s expectations for monetary policy but also signal to global markets that liquidity conditions may become even more accommodative.
Regardless of whether the pace of rate cuts is gradual or steep, capital is already repositioning. The rally in gold and the breakout in cryptocurrencies are just the first waves in a broader asset repricing driven by monetary policy expectations.
As the leadership transition at the Fed approaches, this high-frequency interplay between policy and markets is set to become the new normal. For astute traders, volatility brings opportunity—and understanding the link between macro narratives and micro price movements is the first key to unlocking those opportunities.
