Powell’s Fed Era Nears End as Markets Price in a New Monetary Regime

Jerome Powell’s tenure as Chair of the U.S. Federal Reserve is set to conclude in May 2026, when his current four-year term expires. While Powell could legally remain a governor until 2028, the focus has shifted squarely to who will succeed him and how that leadership change might reshape monetary policy and global markets.

President Donald Trump is expected to announce his nominee for the next Fed Chair in the first week of January 2026, well ahead of Powell’s official departure. Senate confirmation hearings would follow before the new chair takes the helm, most likely in time for the June 2026 Federal Open Market Committee meeting.

Among the names circulating, Kevin Hassett — Director of the White House National Economic Council — has emerged as the clear frontrunner. Prediction markets and financial news outlets show him with significantly higher odds than rivals such as Kevin Warsh, Christopher Waller, Michelle Bowman, or Rick Rieder. Hassett is widely viewed as a dovish candidate who favours earlier and deeper interest rate cuts compared with Powell’s more conservative approach.

Investors have reacted quickly to the possibility of a more accommodative Fed leadership. The expectation of easier monetary policy has already driven repricing across several asset classes even before an official nomination is made.

Gold and silver have been among the biggest beneficiaries. Anticipation of looser policy tends to weaken the U.S. dollar and boost demand for real assets, contributing to record highs in precious metals. Gold recently surpassed $4,400 per ounce, while silver has surged and briefly challenged new all-time highs amid rate-cut speculation.

Cryptocurrencies have also shown sensitivity to Fed leadership bets. Bitcoin, in particular, has reacted to changing rate expectations, as lower interest rates and greater liquidity historically support risk-on assets like digital currencies. Traders in digital asset markets are increasingly pricing in the impact of a potential Fed shift toward easier money.

U.S. equities have largely embraced the narrative too, with rate-sensitive sectors — especially growth and technology stocks — rallying on the prospect of cheaper borrowing costs and prolonged easing. Lower yields typically lift valuations on equities with long-term earnings potential, a dynamic now reflected in broader stock performance.

The U.S. dollar has tended to weaken on these developments. As markets price in a more dovish Fed under a successor like Hassett, the dollar’s appeal as a yield-bearing currency diminishes. This weakness in the greenback also reinforces strength in gold, silver, commodities, and non-USD assets.

That said, there is a growing debate among bond traders and economists about the long-term implications of a dovish pivot. Some warn that too aggressive easing could risk inflation re-acceleration, pressure the dollar further, and introduce heightened volatility across fixed income and stock markets.

Powell’s exit and the race to replace him is more than a personnel story — it is shaping expectations about the trajectory of U.S. monetary policy. Markets are already pricing in the implications, with gold, silver, cryptocurrencies, stocks and the U.S. dollar all reflecting evolving views on rate cuts and risk appetite well ahead of the official transition.