Trump Set to Nominate Bitcoin-Friendly Kevin Warsh as Fed Chair
US financial markets are adjusting as President Donald Trump is expected to nominate Kevin Warsh as the next Federal Reserve chair.
Quick overview
- US financial markets are reacting to the expected nomination of Kevin Warsh as the next Federal Reserve chair, which could alter monetary policy and the treatment of digital assets.
- The US dollar has strengthened and Treasury yields have risen, indicating expectations for a more disciplined Federal Reserve under Warsh's leadership.
- Prediction markets show a significant increase in the likelihood of Warsh's nomination, reflecting investor confidence in his approach to fiscal restraint and tighter monetary policy.
- Despite Warsh's supportive stance on Bitcoin, the cryptocurrency continues to face challenges, struggling to maintain momentum amid tight financial conditions.
US financial markets are adjusting as President Donald Trump is expected to nominate Kevin Warsh as the next Federal Reserve chair. This decision could change US monetary policy and the approach to digital assets. Several reports say an official announcement may come Friday, before Jerome Powell’s term ends in May.
Markets have already reacted to the possibility of Warsh’s appointment. The US dollar has gained strength, Treasury yields have increased, and investors now expect fewer interest-rate cuts. This shows that many expect a more disciplined and inflation-focused Federal Reserve.
Warsh Seen as Top Choice for Fed Chair
Kevin Warsh was on the Federal Reserve’s Board of Governors from 2006 to 2011, including during the global financial crisis. Since then, he has been an influential policy figure, often supporting fiscal restraint, tighter monetary policy, and less reliance on quantitative easing.
Prediction markets responded quickly after news of Trump’s preference. On Polymarket, the chance of Warsh’s nomination jumped to about 95%, up from 30% earlier in the week. Kalshi showed similar results, with Warsh above 90%, while other candidates’ odds dropped sharply.
KEVIN WARSH JUST SOFT-LAUNCHED THE BITCOIN STANDARD
This man sat down in a dark room with two mugs and a rug from the Ottoman Empire and casually implied the Fed has lost the script and that Bitcoin might be the footnote that replaces the entire book.
This is the future Federal… pic.twitter.com/FaqIxH8mLM
— Adam Livingston (@AdamBLiv) January 30, 2026
Markets Expect a More Aggressive Fed
Investors quickly reacted to the idea of Warsh leading the Fed. The US Dollar Index rose as people expected tighter policy to last longer, and benchmark Treasury yields also went up. Inflation is lower than its 2022 peak above 9%, but it is still above the Fed’s 2% target.
Some of the main market changes are:
- Treasury yields are higher, showing that fewer rate cuts are expected
- The stronger dollar is putting pressure on assets that are sensitive to risk
- Rate-cut expectations pushed toward late Expectations for rate cuts have now moved to late 2026ted scope for near-term monetary easing.
Bitcoin Faces Challenges Even as Warsh Shows Openness
Warsh has a different view on Bitcoin compared to current Fed leaders. In a July interview with the Hoover Institution, he said that Bitcoin does not threaten the Fed’s authority and can act as a form of market discipline.
Even with Warsh’s supportive view, Bitcoin has struggled to gain momentum. Its price fell after the Fed’s latest rate decision and has not managed to stay above $90,000. Analysts point to tight financial conditions and delayed rate-cut expectations as main reasons.
If confirmed, Warsh’s appointment would signal a meaningful shift at the Federal Reserve, with consequences for inflation policy, capital markets, and the evolving role of digital assets in the US economy.
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