U.S. President Donald Trump has officially nominated former Fed Governor Kevin Warsh as the next Fed chair, potentially replacing Jerome Powell when his term ends in May. This marks a positive for the crypto industry as Warsh is considered more pro-crypto, although it remains to be seen what his stance on monetary policy is.
Trump Picks Kevin Warsh To Be The Next Fed Chair
In a Truth Social post, the U.S. president announced that he is nominating the former Fed Governor to be the Chair of the Fed’s Board of Governors. Warsh notably served as a Fed Governor from 2006 to 2011.
Trump further remarked that he does not doubt that Kevin Warsh will go down as one of the greatest Fed Chairs and maybe the best. “On top of everything else, he is “central casting,” and he will never let you down.”
This announcement comes just hours after CoinGape reported that Trump was going to name the former Fed Governor to succeed Jerome Powell. Kevin Warsh got the nod ahead of BlackRock’s Rick Rieder and Fed Governor Chris Waller, who were also among the potential candidates to become the next Fed chair.
Warsh is notably pro-crypto, having praised Bitcoin as a store of value like gold. He also described the leading crypto as an important asset that can help policymakers. This is unlike current Fed chair Jerome Powell, who has preferred to avoid discussing crypto and once noted the Fed does not hold BTC and that they are not looking for a law change.
Crypto Traders Still Pricing In Three Fed Rate Cuts
Meanwhile, crypto traders are still pricing in three Fed rate cuts this year despite the nomination of Kevin Warsh, who may be the most hawkish among the candidates who were in contention to succeed Powell. Polymarket data shows a 26% chance that the Fed makes three rate cuts this year. These traders also expect the Fed to hold rates steady until the June FOMC meeting, when Warsh would have taken office.
Source: PolymarketTrump already stated that the next Fed chair must immediately lower rates. As such, there is the possibility that Kevin Warsh would move for a rate cut at the June meeting. While Warsh may be open to rate cuts, it is worth noting that the former Fed governor advocates a smaller Fed balance sheet, suggesting quantitative easing (QE) may not occur anytime soon.
Bitcoin briefly climbed to $83,000 following Trump’s announcement, but is now trading just below this psychological level. The leading crypto had dropped to as low as $81,000 yesterday, marking a two-month low. BTC is now down over 5% year-to-date (YTD) despite climbing to as high as $97,000 at the start of the year.
Senators React To Kevin Warsh’s Nomination
Senator Thom Tillis, who is a member of the Senate Banking Committee, reiterated in an X post that he will oppose any confirmation to the Fed, including Kevin Warsh’s confirmation as the next Fed chair, until the DOJ’s inquiry into Fed chair Jerome Powell is fully and transparently resolved. “Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable,” he said.
Senator Elizabeth Warren also echoed a similar sentiment, stating that no Republican who purports to care about Fed independence should agree to move forward with the Fed chair nomination until Trump drops his “witch hunts” against Fed Chair Jerome Powell and Governor Lisa Cook.
Source: https://coingape.com/trump-nominates-pro-bitcoin-kevin-warsh-as-next-fed-chair-2/
