U.S. financial markets faced renewed pressure after President Donald Trump delivered a key signal on Federal Reserve leadership. The remarks emerged during an interview with U.S. Treasury Secretary Scott Bessent, prompting investors to quickly reassess expectations around monetary policy and leadership stability.
Market sentiment shifted after Trump addressed speculation surrounding Kevin Hassett, praising his media presence while signaling he would remain in his White House role. Consequently, investors saw the comment as reducing the likelihood of his move to the Federal Reserve.
That shift mattered because Hassett has supported lower interest rates, yet Trump’s signal weakened confidence in a near term easing cycle. As a result, markets began pricing in a longer period of tighter financial conditions.
Bessent Confirms Shortlist and Tight Decision Timeline
Bessent expanded on the leadership process, saying the administration reviewed 11 candidates and narrowed the list to 4 finalists, with Trump making the final decision. He added that the choice will prioritize stability and effective cooperation with the Federal Reserve Board.
Additionally, Bessent confirmed the announcement would come within days or weeks, which heightened market sensitivity to signals from Washington. Consequently, traders adjusted positions as they awaited clarity on future monetary direction. Besides leadership, Bessent addressed Federal Reserve accountability, declining to comment on matters involving Jerome Powell due to ongoing processes. Nevertheless, he stressed the need for transparency, citing inefficiency and cost overruns at the institution.
Prediction Markets Flip as Assets React Sharply
Prediction markets reflected the rapid shift in expectations, where Kevin Warsh now leads with about 56% odds. In contrast, Kevin Hassett’s probability stands near 16%, while Christopher Waller follows at roughly 14.2% and Rick Rieder holds around 8.8%. Investors view Warsh as more likely to secure Senate approval and maintain Fed independence. However, he is considered less supportive of aggressive rate cuts, hence expectations tilted toward tighter conditions for longer.
Asset prices responded swiftly as gold lost more than $500bn in market value during the selloff. Bitcoin and silver declined as risk appetite weakened, while major U.S. stock indices turned negative. Bitcoin highlighted the shift clearly, pulling back to about $94,500 after trading near $98,000. The move aligned with falling expectations for near term monetary easing.
Trump’s brief signal reshaped leadership expectations and market positioning. Consequently, investors remain focused on confirmation, with Fed Chair clarity now driving near term market direction.