Trump's Fed Chair Pick: Kevin Warsh Odds Surge on Rate Cuts

President Donald Trump's shortlist for the next Federal Reserve Chair has boosted Kevin Warsh's chances significantly. The former Fed governor now leads as a top contender, exciting crypto markets that favor aggressive rate cuts.

Trump recently narrowed his choices to Warsh and Kevin Hassett, calling them "the two Kevins." He emphasized wanting a leader open to lowering interest rates quickly and consulting the White House.

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Trump's Narrowed Fed Chair Shortlist

Trump has focused on two main candidates to replace Jerome Powell, whose term ends in May 2026.

• Kevin Warsh: Former Fed governor, now at the top of Trump's list after recent interviews and praise.

• Kevin Hassett: Current National Economic Council director, previously the frontrunner but with slipping odds.

Trump stated Warsh aligns with his view on reducing rates, saying the U.S. should have the lowest rates among major economies. He expects an announcement soon, potentially influencing policy ahead of Powell's term end.

Read Also: Trump Signals Immediate Pick for Next Fed Chair

Rising Odds for Kevin Warsh

Prediction markets reacted swiftly to Trump's comments. Warsh's probability jumped from around 15% to over 38% on platforms like Polymarket and Kalshi.

Traders see Warsh as more likely to support faster rate cuts than current policy. His past criticism of high rates resonates with Trump's priorities.

Wall Street support adds momentum: PMorgan CEO Jamie Dimon endorsed Warsh as a credible option. Other names like Fed Governors Chris Waller and Michelle Bowman remain in consideration, but focus stays on the top two.

Market Expectations for Aggressive Rate Cuts

Markets anticipate the next Fed chair will push for quicker easing. Current forecasts suggest limited cuts in 2026, but a Trump nominee could accelerate this.

Lower rates typically boost risk assets, including cryptocurrencies. Crypto traders bet on Warsh or Hassett delivering looser policy.

Potential impacts:

• Increased liquidity flowing to Bitcoin and altcoins.

• Reduced appeal of safe assets like bonds.

• Support for higher crypto valuations in a low-rate environment.

Read Also: Trump Proposes Crypto Tax Exemption: Market Implications

Why Crypto Markets Are Watching Closely

Lower interest rates historically drive investment into high-growth assets like Bitcoin. Trump's push for cuts could create a favorable backdrop for crypto.

Aggressive easing might:

• Weaken the dollar, benefiting Bitcoin as a hedge.

• Encourage risk-taking in digital assets.

• Align with broader pro-crypto policies under Trump.

However, rapid cuts raise inflation concerns, which critics say could undermine Fed independence.

Concerns Over Fed Independence

Some experts and lawmakers worry Trump's influence might erode the Federal Reserve's traditional autonomy. He has insisted the president should be consulted on rates, a departure from norms.

Critics fear pressure for quick cuts could reignite inflation. Trump dismisses these concerns, viewing low rates as essential for growth.

Read Also: Barron Trump Wallet Address Sparks Accusations of Market Manipulation

Conclusion

Trump's Fed chair selection remains a key event for markets. A Warsh or Hassett nomination signals potential for more dovish policy, exciting crypto investors eyeing rate cuts.

As odds favor candidates open to easing, Bitcoin and other digital assets could benefit from increased liquidity. The decision highlights the intersection of politics, monetary policy, and emerging markets like crypto.

FAQ

Why are markets pricing Kevin Warsh as the top Fed Chair pick?

Trump’s public support and Warsh’s dovish stance on faster rate cuts pushed his odds sharply higher in prediction markets.

How would a Warsh-led Fed impact interest rate policy?

Markets expect more aggressive and earlier rate cuts compared to current Fed projections, shifting policy toward faster easing.

Why do rate cut expectations matter for crypto markets?

Lower rates increase liquidity and risk appetite, which historically drives capital into Bitcoin and high-beta altcoins.

What signals are prediction markets like Polymarket reflecting?

Traders are betting on political influence shaping Fed policy, with Warsh seen as more aligned with Trump’s low-rate agenda.

What’s the main risk of aggressive rate cuts under a new Fed chair?

Faster easing could weaken Fed independence and reignite inflation, creating long-term macro volatility despite short-term crypto gains.

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