The Trump administration is evaluating at least 11 individuals to succeed Jerome Powell when his tenure as Federal Reserve chair concludes in May. At least three of these candidates have expressed favorable viewpoints about cryptocurrency.
Treasury Secretary Scott Bessent informed Fox News on Wednesday that there are 11 “very strong candidates” for the Fed chair position, which he plans to assess and narrow down starting next month.
The candidates’ roster, as CNBC reported on Aug. 13, citing two officials from the administration, features Dallas Fed President Lorie Logan, former St. Louis Fed President James Bullard, Fed Vice Chair Philip Jefferson, Fed Governor Chris Waller, Fed Vice Supervision Chair Michelle Bowman, and former Fed Governor Larry Lindsey.
The lineup also encompasses Bush administration economic adviser Marc Sumerlin, investment bank Jefferies chief market strategist David Zervos, and BlackRock’s chief investment officer for global fixed income, Rick Rieder.
The Federal Reserve influences US interest rates, which in turn determine how markets invest. Reduced interest rates enhance liquidity and often encourage investments in volatile, high-risk assets like crypto, while rate hikes generally lead investors to unload riskier positions.
Rieder previously stated Bitcoin is “here to remain”
BlackRock’s Rieder has made optimistic remarks regarding crypto in previous instances.
He informed The Wall Street Journal in early 2024 that Bitcoin could potentially “be a significant component of the asset allocation framework” and that “over time, people become increasingly comfortable with it.”
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Rieder stated to CNBC in November 2020 that he believed crypto and Bitcoin were “here to stay” and that “the openness — especially of millennials — towards technology and cryptocurrency is tangible.”
BlackRock oversees the largest Bitcoin and Ether (ETH) exchange-traded funds available.
Feds Waller, Bowman adopt crypto-friendly policies
The Fed’s Waller and Bowman, reportedly also in consideration, have both recently indicated a supportive stance towards crypto.
Bowman, the Fed’s lead regulatory official, mentioned on Aug. 20 that the central bank’s personnel ought to be permitted to invest a limited amount in crypto to better comprehend the technology, adding that this would assist in achieving a “functional understanding of the underlying mechanics.”
Fed Governor Waller asserted the following day that the banking industry had “nothing to fear” regarding crypto transactions occurring outside the conventional banking framework, as it was “merely new technology for transferring assets and recording transactions.”
By contrast, Powell has addressed crypto on several occasions and typically advocated for a cautious approach. He remarked in June that crypto had gained increased mainstream acceptance and anticipated banks would enhance their involvement with the sector.
In December, he remarked that Bitcoin was more of a rival to gold than to the US dollar.
Notable mention: Jefferies collaborates with crypto
Meanwhile, Jefferies, the investment bank where Zervos leads strategy, is engaged with crypto-related enterprises.
The bank has supported the recent public listings of trading platform eToro, stablecoin issuer Circle Internet Group, crypto exchange Bullish, and crypto-based lender Figure Technology Solutions.
It also made early investments in the Bitcoin (BTC) purchasing initiatives of Michael Saylor’s Strategy and is reported to have had a senior banker dedicated solely to crypto for at least five years.
Powell’s term as chair concludes in May, yet his 14-year duration on the Fed board will continue until early 2028. His much-anticipated address on Friday elevated expectations of an interest rate reduction, with financial markets now forecasting that the Fed will lower rates during its mid-September meeting.
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