Treasury urges Warsh confirmation as DOJ probe of Powell continues
US Treasury Secretary Scott Bessent urged the Senate Banking Committee to begin confirmation hearings for Kevin Warsh as President’s Federal Reserve chair nominee despite an ongoing Department of Justice probe into current Fed Chair Jerome Powell. Bessent told Fox News the committee should proceed with hearings while monitoring the DOJ investigation. Senator Thom Tillis has threatened to delay Warsh’s confirmation until the DOJ completes its probe, a stance that could complicate the panel’s Republican majority. Senator Elizabeth Warren pressed Bessent on whether Warsh would be shielded from legal or political pressure over interest-rate decisions; Bessent said enforcement is “up to the president,” offering no direct assurance. The dispute raises political and legal uncertainty around Fed leadership and monetary-policy continuity. Crypto markets reacted quickly when Warsh was nominated earlier: bitcoin (BTC) fell sharply and leveraged long positions saw large liquidations, an example traders should weigh when updating rate-expectation and risk-positioning. Traders should monitor confirmation progress, DOJ developments, and Fed messaging — heightened political risk can increase volatility, affect rate expectations, and influence risk-on assets like BTC.
Bearish
The combined reporting increases political and legal uncertainty around Fed leadership and therefore U.S. monetary-policy outlook. Markets reacted negatively when Warsh was nominated, with BTC dropping sharply and large leveraged long liquidations — a direct precedent linking Fed-chair nomination risk to crypto price pressure. Continued DOJ scrutiny of Powell and potential delays in confirming Warsh sustain uncertainty about future rate paths and central-bank independence. For crypto traders this implies elevated short-term volatility and higher tail-risk for risk-on assets: headline-driven sell-offs, forced deleveraging, and correlation with rate-sensitive sectors are more likely. Over the medium term, if a hawkish Fed chair like Warsh is confirmed, tighter policy expectations could be negative for crypto; conversely, political gridlock or delays could heighten uncertainty and episodic moves but not necessarily produce a clear long-term bullish catalyst. Given the immediate history of price drops and liquidation events tied to the nomination, the near-term price impact on BTC is assessed as bearish.