Trump Prepares to Name a New Federal Reserve Chair
U.S. President Donald Trump is expected to nominate Kevin Warsh as the next chair of the Federal Reserve, marking a potentially significant shift in U.S. monetary policy. Trump confirmed on Thursday that he would announce his pick on Friday morning, with major outlets including Bloomberg, The Wall Street Journal, and The New York Times all reporting that Warsh is the clear frontrunner.
Warsh previously served as a Federal Reserve governor from 2006 to 2011, a period that included the global financial crisis. According to Reuters, Trump met with Warsh on Thursday, and a source familiar with the meeting said the former Fed official left a strong impression on the president.
The nomination would come as current Fed Chair Jerome Powell’s term is set to expire in May, opening the door for Trump to reshape the central bank’s leadership during a period of elevated geopolitical and economic uncertainty.
Prediction Markets Price In Near-Certain Nomination
Expectations around Warsh’s nomination hardened rapidly in betting markets. On Polymarket, Warsh’s odds surged from roughly 30% to 95%, while former frontrunner Rick Rieder of BlackRock saw his chances collapse to just 3.4%.
A similar picture emerged on Kalshi, where Warsh’s odds climbed to 93%, leaving Rieder and economist Kevin Hassett far behind. The sharp repricing reflects growing consensus that Trump is opting for a more hawkish and fiscally conservative Fed leader.
Markets reacted swiftly to the shifting expectations. The U.S. dollar strengthened, and Treasury yields moved higher as investors priced in the possibility of tighter monetary policy and a more aggressive stance on inflation under Warsh’s leadership.
A Hawkish Reputation With a Pro-Bitcoin Twist
Warsh is widely viewed as a Fed chair nominee who would prioritize fiscal restraint, lower inflation, and a faster exit from quantitative easing, distinguishing him sharply from Powell’s more cautious and at times dovish posture.
Notably for crypto markets, Warsh has also expressed a far more nuanced view of Bitcoin than the current Fed chair. While Powell has repeatedly downplayed Bitcoin’s role in the U.S. economy, Warsh has argued that the asset could serve as a form of market discipline for policymakers.
In a July interview with the Hoover Institution, Warsh rejected the idea that Bitcoin threatens the Federal Reserve’s authority, instead framing it as a signal rather than a destabilizer.
Those comments have resurfaced as his nomination appears imminent, fueling speculation that a Warsh-led Fed may be less hostile to crypto markets even if broader monetary conditions tighten.
What a Warsh Fed Could Mean for Markets
If confirmed, Warsh would inherit a complex backdrop. Inflation has cooled from its peaks but remains politically sensitive, while debt levels, trade tensions, and geopolitical risks continue to pressure global markets.
For traditional finance, Warsh’s hawkish stance suggests less tolerance for prolonged stimulus and a stronger emphasis on policy credibility. For crypto, the picture is more mixed. Higher rates and tighter liquidity could weigh on speculative assets, but Warsh’s acknowledgment of Bitcoin as a policy signal may reduce regulatory hostility at the central bank level.
While the Fed does not regulate crypto directly, its tone and leadership shape broader financial conditions - and investor psychology. Trump’s expected nomination of Warsh signals a clear message:
