Speculation is intensifying around former President Donald Trump's alleged selection of Kevin Warsh as the next Chair of the Federal Reserve. According to reports, Trump has chosen Warsh, with an official announcement expected. However, no confirmation has been issued by Trump or official Federal channels, and Warsh himself stated, "No confirmation exists regarding my selection as the next Federal Reserve Chair."
Prediction markets are heavily favoring the move, with platforms like Polymarket showing odds for Warsh as high as 86-87%. This speculation is driving expectations for a potential shift in U.S. monetary policy. Analysts note that Warsh, a former Federal Reserve Governor, is perceived as potentially more dovish in the short term, which could favor initial interest rate cuts—a scenario often viewed as positive for risk assets like cryptocurrencies.
Warsh's background reveals a complex policy stance. His path to the Fed's inner circle began on Wall Street at Morgan Stanley, followed by a role as Special Assistant to President George W. Bush for Economic Policy. Nominated to the Fed Board at age 35, he became its youngest member ever. His tenure was marked by early warnings about market liquidity risks and notable dissent against prolonged monetary stimulus, such as the second round of quantitative easing (QE2) in 2010. Former Fed Chair Ben Bernanke noted in his memoir that Warsh believed monetary policy was reaching its limits and that fiscal policy should take more responsibility.
Market participants are closely watching this potential appointment, as it could signal a change in the Fed's approach to inflation and economic support. Trump's reported dissatisfaction with current Fed policy adds to the anticipation. The crypto industry awaits official confirmation for clarity on future regulatory and monetary landscapes, which are key drivers of digital asset valuations.
