CICC: If Hasset becomes the chairman of the Federal Reserve, it may cause U.S. Treasury yields and the dollar to decline first and then rise

According to a report by CICC, under the baseline scenario, if Hassett becomes the new Federal Reserve Chairman, it could lead to a temporary decline in U.S. Treasury yields and the dollar, which would overall be beneficial for U.S. stocks.

From a timeline perspective, in early 2026, Trump will announce the new chairman nomination. For Hassett, he first needs to be nominated as a Federal Reserve Governor and confirmed by the Senate, then nominated as chairman and confirmed again. He would officially become chairman after the current chairman Powell's term ends in May 2026, and could start to lead the June FOMC meeting.

The first quarter of next year will be a critical period for market expectations following the new chairman's nomination. If Hassett expresses overly dovish views at that time, there is a possibility that U.S. Treasury yields and the dollar may temporarily decline more than expected. However, as long as it does not significantly cross into the territory of "concerns about loss of independence," the combination of expectation fulfillment and the recovery of the U.S. economy may lead to an upward trend in U.S. Treasury yields and the dollar.