The leadership transition at the Federal Reserve in 2026 is imminent, and this personnel contest concerning the global liquidity landscape has already begun to influence market nerves. Who will sit in the chair of the Federal Reserve Chairman will directly impact future monetary policy directions and also affect the medium-term performance of cryptocurrencies like BTC, ETH, and others.

Currently, the focus is on two candidates—referred to as the "Double Kevin" by the public. One is Kevin Waugh, seen as a pragmatic representative, closely connected to the current government, advocating for the simplification of the Fed's functions. Market predictions give him an approximately 47% chance of being nominated. The other, Kevin Hasset, is a typical data-driven candidate, supporting rate cuts but insisting on the independence of the central bank. Recently, his nomination probability has risen to 54%, reflecting, to some extent, market concerns about central bank independence.

More noteworthy is President Trump’s attitude. He has publicly stated multiple times his intention to significantly cut interest rates, and there are even rumors of establishing an informal advisory mechanism on Fed decisions within the White House. If such political influence materializes, the long-standing tradition of the Fed’s independent decision-making could be broken, which would cause considerable shocks to long-term interest rates and inflation expectations.

From an economic fundamentals perspective, the CPI has fallen back to 2.7%, theoretically opening the door for rate cuts. However, the labor market remains quite resilient, making the timing and magnitude of rate cuts controversial. According to CME FedWatch data, the market’s expectation of an immediate rate cut at the start of 2026 is not very optimistic; by the March meeting, the probability of a rate cut rises only to 42.2%.

What does this mean? For cryptocurrencies like BTC, ETH, and XRP, the certainty of a rate cut in the short term is not high, but the Fed Chair candidate will serve as a long-term signal. If a candidate who compromises to political pressure is ultimately chosen, the market may preemptively release liquidity expectations; otherwise, more patience will be required.