I just saw that many friends in the English-speaking community believe that the decline in US stocks and $BTC tonight is due to Trump hinting that he does not want Kevin Hasset to succeed Powell as the new Federal Reserve Chair.

Later today, during a speech, Trump said, “Kevin Hasset was fantastic on TV today. Actually, I really want you to stay in your current position. If I move you to the Fed, but Fed people don’t talk much, I will lose you. That’s a serious concern for me.”

The general idea is that Trump really likes Kevin Hasset’s frequent media appearances and thinks Hasset’s speeches are very good. If Hasset is transferred to the Fed, there may temporarily be no suitable replacement. After the speech, market predictions that Hasset could become Fed Chair dropped significantly, while the chances for another candidate, Kevin Wirth, rose to 60%.

The reason this caused a decline in risk markets is because Kevin Wirth is a former Fed Governor with a very hawkish stance during his tenure. This might not be the best choice for Trump, who wants to cut interest rates. Of course, this is the market’s view, but I personally think Trump wouldn’t be foolish enough to support Powell. If he chooses Kevin Wirth, it’s likely because Wirth already shares a consensus on easing monetary policy.

I believe someone like this would be more suitable—someone who can listen to Trump’s instructions when easing is needed, and once a recession is truly expected in the US economy, he wouldn’t be a “flattering dog.” Also, Kevin Wirth has served five years as a Fed Governor, gaining more experience and connections.

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