US President Donald Trump is expected to nominate Kevin Warsh as the next chairman of the Federal Reserve, with a formal announcement expected Friday morning.
Key points to remember:
- Kevin Warsh has emerged as the clear favorite to replace Jerome Powell as head of the Fed, with predictive markets pricing his chances at over 90%.
- Markets reacted to the prospect of a more hawkish Fed, with the dollar strengthening and Treasury yields rising.
- Warsh’s relatively positive view toward Bitcoin could signal a shift in tone from the Fed in favor of digital assets.
Several media outlets, including Bloomberg, reported that Warsh had become Trump’s choice to replace current Fed Chairman Jerome Powell, whose term expires in May.
Reuters earlier reported that Trump met with Warsh on Thursday, citing a source familiar with the matter who said the former Fed governor made a strong impression.
Warsh emerges as clear favorite for Fed chair as prediction odds rise
Warsh served on the Federal Reserve Board of Governors from 2006 to 2011 and has remained an influential voice on monetary policy since leaving the central bank.
Prediction markets quickly reflected this change. On Polymarket, Warsh’s chances of being nominated increased from around 30% to 95%, while former front-runner Rick Rieder of BlackRock saw his chances drop sharply.
A similar dynamic occurred in Kalshi, where Warsh was valued at 93%, far ahead of economist Kevin Hassett and Rieder.
Warsh is widely seen as a more hawkish candidate, favoring fiscal discipline, a tougher stance on inflation and a continued abandonment of quantitative easing.
Anticipation of his appointment has already rippled through markets, with the U.S. dollar strengthening and Treasury yields rising as investors adjusted their expectations for future monetary policy.
Unlike Powell, who has often downplayed Bitcoin’s role in the US financial system, Warsh has expressed a more receptive view of the cryptocurrency.
In a July interview with the Hoover Institution, he claimed that Bitcoin did not threaten the authority of the Fed and could instead act as a form of market feedback.
“Bitcoin doesn’t bother me,” Warsh said at the time, adding that it could “ensure market discipline” and serve as a “very good policy watchdog.”
His comments resonated with crypto market participants who view Bitcoin as a hedge against political missteps.
If confirmed, Warsh’s appointment would mark a notable shift in tone at the Fed, with potential implications for risky assets as well as the broader debate over the role of digital currencies in the U.S. economy.
Fed standoff keeps rates unchanged as Bitcoin struggles to gain momentum
US President Donald Trump stepped up pressure on Jerome Powell, including threatening a criminal investigation, but the Federal Reserve again kept interest rates steady, citing strong growth and still-high inflation.
Powell declined to comment on the investigation and defended the Fed’s independence, warning that politicizing monetary policy would damage the institution’s credibility.
The rate decision weighed on Bitcoin, which slid after the announcement and repeatedly failed to rise above $90,000.
Analysts say the lack of a short-term rate cut is limiting demand for risky assets, even as stocks and gold hit record highs.
Market forecasts and Wall Street forecasts now point to a low likelihood of cuts before mid-year, with expectations pushed back to the second half of 2026.
The post Trump Expects to Nominate Bitcoin-Friendly Kevin Warsh as Next Fed Chairman appeared first on Cryptonews.
