The latest developments in the Fed chair nomination are reshaping market expectations. On January 17, Trump mentioned the current White House National Economic Council Director, Brian Deese, hinting at a possible alternative candidate—this signal instantly rewrote Wall Street's betting logic.

Data from prediction market Polymarket best illustrates the point. Deese's probability of being nominated has plummeted from a competitive stance to just 15%, making him a long shot, while Kevin Waugh has surged ahead, with his nomination probability soaring to over 60%. This is not just a numerical change but also a re-pricing of market expectations regarding the future direction of monetary policy.

The policy stances of the two candidates are markedly different. As a staunch ally of Trump, Deese advocates for active easing; in contrast, Waugh belongs to the hawkish camp. But this doesn't mean BTC holders need to panic—although Waugh is more hawkish, market expectations suggest he will still cut rates in 2025 and continue balance sheet reduction operations. This effectively represents a "tightening yet flexible" policy approach.

Even more interesting are Waugh's economic views. He insists that inflation results from the Fed's proactive choices rather than external shocks and holds an extremely optimistic outlook on the US economy—especially regarding AI-driven productivity revolutions and deregulation waves, which can be likened to the economic boom of the 1980s. This optimistic tone may not necessarily be bad news for risk assets.

What BTC investors need to pay attention to is: in the Waugh era, the Federal Reserve might prioritize growth over purely fighting inflation, providing a new logic for crypto asset allocation.