Trump Nominates Kevin Warsh as Next Fed Chair

Who Is Kevin Warsh?

Kevin Warsh, 55, brings deep financial and policy experience. He served as a Federal Reserve Governor from 2006 to 2011, where he helped steer the U.S. economy through the 2008 financial crisis. A Harvard Law and Stanford graduate, Warsh previously worked at Morgan Stanley and served in the Bush administration. Today, he is a partner at Duchesne Capital alongside Stan Druckenmiller.

Warsh’s views on monetary policy have evolved. While historically hawkish—favoring tight monetary control—he has recently expressed support for lower interest rates. This aligns with Trump’s repeated calls for aggressive rate cuts to spur economic growth.

Political and Market Reactions

Republican leaders quickly rallied behind the nomination. Senator Tom Cotton praised Warsh’s readiness to lead the Fed, while analysts called him a “credible” yet unconventional pick. Despite his past support for tighter policy, many experts believe Warsh could now champion looser rates under Trump’s influence.

Markets responded swiftly. Gold and silver posted some of their steepest declines in years, as investors feared a return to tighter monetary policy. The U.S. dollar strengthened, while equities and crypto markets wobbled on renewed uncertainty. Bitcoin, for example, dropped below $81,000 shortly after the news broke.

Prediction markets like Polymarket and Kalshi showed Warsh’s confirmation odds jumping to 92%, reflecting investor confidence despite some early skepticism.

Implications for Crypto

The crypto industry received the news with mixed emotions. On one hand, Warsh’s prior comments suggest a level of openness. He has called Bitcoin a “sustainable store of value” and has invested in blockchain startups. Moreover, he supports loosening restrictions on banks working with crypto, which could foster innovation.

On the other hand, Warsh’s reputation as an inflation hawk sparked short-term fear. Bitcoin plunged amid concerns that he might prioritize traditional monetary stability over risk-asset growth. Billions flowed out of crypto ETFs, and many investors questioned whether Warsh would support or stifle digital finance.

Still, some analysts believe a Warsh-led Fed could eventually benefit crypto. If he follows through on hints to reduce the Fed’s balance sheet and cut rates, this could inject liquidity into markets and boost appetite for alternative assets like Bitcoin.

What Comes Next

Warsh must now face Senate confirmation. However, Powell remains under investigation, and some lawmakers have already voiced concerns about replacing a sitting chair during such a period. This could delay Warsh’s transition.

Markets will closely monitor Warsh’s testimony and early remarks for signals about his monetary stance. Will he stick to his hawkish past, or pivot toward Trump’s preferred pro-growth approach? Crypto traders, meanwhile, will look for cues on how a Warsh-led Fed could reshape the digital asset landscape.

With Powell’s term ending in May and hearings likely in the coming weeks, the Federal Reserve may be poised for one of its most significant leadership shifts in years.