Trump Says Next Fed Chair Must Immediately Cut Rates as Crypto Traders Bet on 2026 Cuts

U.S. President Donald Trump has again signaled that the next Fed chair must immediately cut interest rates. This comes as crypto traders have already begun to bet on how many rate cuts the Fed is likely to make next year, even as Trump is likely to gain more control of the FOMC.

Trump Sets Immediate Rate Cuts As Requirement For Next Fed Chair

During a Politico interview, Trump stated that immediate rate cuts would be a litmus test for whoever replaces Jerome Powell. This comes as the U.S. president continues to push for lower interest rates.

As CoinGape reported, rate-cut advocate and White House economic advisor Kevin Hassett has emerged as the favorite to become the next Fed chair. Polymarket data show a 77% chance that Trump nominates him to replace Powell. The U.S. president has stated that he could announce the new chair by early 2026.

Trump also recently described Hassett as the potential Fed chair, again signaling that he has made his decision on who will replace Powell. Hassett has continued to advocate for lower cuts and recently stated that the Fed should lower rates by 25 basis points at tomorrow’s FOMC meeting.

The U.S. president is likely to gain more control over the FOMC with his nomination of a rate-cut advocate. Notably, three out of the seven Fed Governors, Chris Waller, Michelle Bowman, and Stephen Miran, have already shown their willingness to lower interest rates.

However, it is worth noting that the next Fed chair will take over Miran’s seat, whose term expires in January. As such, Trump would still need to win over one seat on the Fed Board to gain a majority, as Powell’s tenure on the board doesn’t end until 2028. There is a possibility that Powell may resign after his term as chair, as most past chairs have done.

How Many Rate Cuts Will The Fed Make In 2026?

Crypto traders are already betting on how many rate cuts the Fed will make in 2026. Polymarket data shows there is currently a 23% chance of three 25-basis-point cuts next year.

Meanwhile, there is a 20% chance that the FOMC will lower rates four times, totaling a 100 bps cut. There is an 18% chance and a 12% chance of five cuts. It is worth mentioning that Powell’s term as the Fed chair ends in May. As such, he will preside over three out of the eight FOMC meetings in 2026.

Powell is likely to make it clear at the post-FOMC press conference tomorrow that future cuts will depend on the incoming data. The Fed will have more data ahead of the January FOMC meeting. As CoinGape reported, the Department of Labor will release the October and November PPI inflation reports on January 14, two weeks before the January 28 meeting.

Meanwhile, Fed chair favorite Hassett stated that it is “irresponsible” to specify what the Fed’s six-month plan regarding monetary policy will be. He remarked that they should determine monetary policy based on the incoming data.