Donald Trump is expected to nominate Kevin Warsh as the next chair of the Federal Reserve, with an official announcement likely as early as Friday morning, according to multiple media reports.
Warsh has quickly emerged as the clear frontrunner to replace current Fed Chair Jerome Powell, whose term ends in May. Prediction markets now put the odds of Warsh getting the job at over 90%, and markets are already reacting as if the decision is all but done.
Markets Move as Warsh Becomes the Clear Favorite
Reports from outlets including Bloomberg say Warsh is Trump’s pick, while Reuters added that Trump met with the former Fed governor on Thursday and came away impressed. That meeting appears to have sealed Warsh’s rise to the top.
Prediction markets reflected the shift almost immediately. On Polymarket, Warsh’s odds jumped from around 30% to 95%, while former favorite Rick Rieder of BlackRock saw his chances collapse. Similar moves played out on Kalshi, where Warsh was priced at 93%, far ahead of other contenders like economist Kevin Hassett.
Warsh served on the Fed’s Board of Governors from 2006 to 2011 and has remained an influential voice on monetary policy ever since. He’s widely viewed as more hawkish than Powell — favoring tighter fiscal discipline, a tougher stance on inflation, and a continued move away from quantitative easing.
Investors are already adjusting to that possibility. The US dollar has strengthened, Treasury yields have edged higher, and expectations for easier monetary policy have been pushed further out.
A Different Tone on Bitcoin
One area where Warsh clearly differs from Powell is Bitcoin.
While Powell has consistently downplayed crypto’s role in the US financial system, Warsh has taken a more open — and surprisingly constructive — view. In a July interview with the Hoover Institution, he said Bitcoin doesn’t threaten the Fed’s authority and could actually act as a form of market feedback.
“Bitcoin doesn’t trouble me,” Warsh said, adding that it can “provide market discipline” and act as “a very good policeman for policy.”
Those comments have resonated with crypto investors who see Bitcoin as a hedge against policy mistakes rather than a challenge to the financial system itself. If confirmed, Warsh’s appointment would mark a noticeable shift in tone at the Fed when it comes to digital assets.
Fed Tensions Weigh on Bitcoin’s Momentum
The backdrop remains tense. Trump has ramped up pressure on Powell, even floating the idea of a criminal investigation, but the Fed has once again held interest rates steady, citing strong economic growth and inflation that remains above target.
Powell declined to comment on the investigation talk and defended the Fed’s independence, warning that politicizing monetary policy would damage the institution’s credibility.
For Bitcoin, the outcome hasn’t been encouraging. Prices slipped after the rate decision and continue to struggle to break above $90,000, despite strength in equities and record highs in gold.
Analysts say the lack of near-term rate cuts is keeping risk appetite in check. Prediction markets and Wall Street forecasts now suggest rate cuts are unlikely before mid-year, with expectations increasingly pushed into the second half of 2026.
Until policy loosens — or leadership at the Fed truly changes — Bitcoin appears stuck waiting for clearer macro tailwinds.
