US President Donald Trump is expected to nominate Kevin Warsh as the next chair of the Federal Reserve, with an official announcement anticipated Friday morning.
Key Takeaways:
- Kevin Warsh has emerged as the clear favorite to replace Jerome Powell as Fed chair, with prediction markets pricing his odds above 90%.
- Markets have reacted to the prospect of a more hawkish Fed, with the dollar strengthening and Treasury yields rising.
- Warsh’s comparatively positive view of Bitcoin could signal a shift in tone at the Fed toward digital assets.
Multiple media outlets, including Bloomberg, have reported that Warsh has emerged as Trump’s pick to replace current Fed chair Jerome Powell, whose term expires in May.
Reuters earlier reported that Trump met with Warsh on Thursday, citing a source familiar with the discussion who said the former Fed governor made a strong impression.
Warsh Emerges as Clear Fed Chair Favorite as Prediction Odds Surge
Warsh served on the Federal Reserve’s 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 the shift. On Polymarket, Warsh’s odds of being nominated surged from around 30% to 95%, while former frontrunner Rick Rieder of BlackRock saw his chances fall sharply.
Similar dynamics played out on Kalshi, where Warsh was priced at 93%, far ahead of economist Kevin Hassett and Rieder.
Warsh is widely viewed as a more hawkish candidate who would favor fiscal discipline, a tougher stance on inflation and a continued move away from quantitative easing.
Anticipation of his nomination has already rippled through markets, with the US dollar strengthening and Treasury yields ticking higher as investors adjusted 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 argued that Bitcoin does not threaten the Fed’s authority and could instead act as a form of market feedback.
“Bitcoin doesn’t trouble me,” Warsh said at the time, adding that it can “provide market discipline” and serve as “a very good policeman for policy.”
His comments have resonated with crypto market participants who see Bitcoin as a hedge against policy missteps.
If confirmed, Warsh’s appointment would mark a notable shift in tone at the Fed, with potential implications for risk assets as well as the broader debate over the role of digital currencies in the US economy.
Fed Standoff Keeps Rates on Hold as Bitcoin Struggles for Momentum
US President Donald Trump has intensified pressure on Jerome Powell, including threats of a criminal investigation, but the Federal Reserve has again held interest rates steady, citing solid growth and still-elevated inflation.
Powell declined to comment on the investigation and defended the Fed’s independence, warning that politicizing monetary policy would undermine the institution’s credibility.
The rate decision weighed on Bitcoin, which slipped after the announcement and has repeatedly failed to break above $90,000.
Analysts say the lack of near-term rate cuts is limiting demand for risk assets, even as equities and gold hit record highs.
Prediction markets and Wall Street forecasts now point to a low probability of cuts before mid-year, with expectations pushed toward the back half of 2026.
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