Trump confirms new Federal Reserve Chair is male, Waller becomes a hot candidate, why is the crypto market so sensitive

Trump has sent new signals regarding the Fed Chair nomination at the Davos World Economic Forum. He stated that he will announce the new Fed Chair soon, and that the next Chair will be a male and a “respected person.” This seemingly brief statement has triggered a chain reaction in the markets. Meanwhile, prediction market data shows that former Fed Governor Kevin Wirth has become the frontrunner, with his chances soaring to about 60%.

Key Information Behind Trump’s Remarks

Subtle signals in the statement

Trump said in Davos that each Fed Chair candidate left a deep impression on him during interviews, but he also pointed out a problem: once in office, people tend to change their behavior. He described this phenomenon as “a kind of betrayal,” with a tone that carried some dissatisfaction, but he also acknowledged that “they must do what they believe is right.”

This statement reflects Trump’s complex attitude toward the Fed’s independence. On one hand, he hopes the new Chair will act according to his policy preferences; on the other hand, he recognizes that the Fed Chair needs to exercise independence. This contradictory stance is precisely why markets are highly sensitive to the Fed Chair nomination.

Clear gender indication

Trump specifically emphasized that the next Chair will be male. While this may seem like a simple piece of information, it actually rules out some candidates. Such a clear statement is uncommon in personnel appointments and reflects Trump’s firm stance on this decision.

How Markets React

Rapid changes in candidate probabilities

According to prediction market data from Kalshi and Polymarket, the chances of Fed Chair candidates have changed significantly:

Wirth has leapfrogged from a close race with Hasset to become the top candidate. This shift was driven by Hasset’s recent public statement that Trump is more likely to want him to remain in his current White House position. The market quickly interpreted this as Hasset essentially withdrawing from the Fed Chair race.

Sensitive reaction in the crypto market

Related news shows that while Trump has been signaling various policies, the crypto market has experienced noticeable volatility. On January 19, Bitcoin briefly fell below $92,000, with over $800 million in liquidations across the network, and long positions accounting for nearly 90%. Behind this volatility are uncertainties about tax policies and concerns over potential policy changes stemming from the Fed Chair appointment.

Why is the crypto market so sensitive to the Fed Chair choice?

Importance of policy orientation

The policy stance of the Fed Chair directly impacts U.S. monetary policy. If the new Chair is perceived as more “hawkish” (favoring tightening), it could push the dollar index higher and put pressure on dollar-denominated crypto assets. Market reports indicate rising expectations of a “hawkish turn” by the Fed, which is one of the key triggers for crypto market declines.

Cumulative policy uncertainties

The current Fed Chair Powell’s term ends on May 15, meaning the new Chair will be confirmed within the next four months. During this period, multiple policies from Trump (tariffs, fiscal policies, etc.) are ongoing, and the combined effect of policy uncertainties has put significant pressure on risk assets.

Market sentiment transmission

Analysis from Matrixport points out that despite Trump’s renewed threats of tariffs, implied volatility for Bitcoin and Ethereum has only risen slightly. This suggests that market reactions are more driven by risk-averse sentiment rather than technical analysis. In this environment, any new information about the Fed Chair can trigger re-pricing in the markets.

Implications of Wirth becoming a frontrunner

Kevin Wirth, as a former Fed Governor, is relatively more conservative on monetary policy. The market’s view of him as a leading candidate partly reflects expectations of a more cautious Fed policy in the future. However, Trump’s unpredictable style in personnel matters means the final outcome remains uncertain.

Follow-up focus

Trump said he will announce his successor within this month but has not provided a specific timetable. This keeps the market in a wait-and-see mode, where every new piece of information could lead to reassessment. Additionally, a judicial investigation into the renovation of the Fed headquarters adds uncertainty to the selection process, further increasing market unpredictability.

Summary

Trump’s comments on the Fed Chair are brief but multi-layered. From the explicit mention of “male” to the requirement of being a “respected person,” and his complex attitude toward Fed independence, all shape market expectations for future policy. Wirth’s rise as a frontrunner reflects market pricing of a potentially more conservative stance. Amid ongoing policy uncertainties, the crypto market’s sensitive reaction to the Fed Chair race is expected to continue until the new Chair takes office in May. During this process, every new piece of information could become a market turning point.