Over 23% of traders now expect March FOMC rate cut after Warsh nomination
Over 23% of traders now expect a 25-basis-point Fed rate cut at the March FOMC meeting, up from 18.4% a few days earlier, according to CME Group data. The shift followed investor concern over the nomination of Kevin Warsh as Federal Reserve chair by President Trump; markets view Warsh as relatively hawkish, citing his comments that the Fed’s balance sheet is "trillions larger than it needs to be." No traders expect a cut of 50 bps or more. Analysts say the nomination has injected uncertainty: some see it as signaling stable or tighter liquidity rather than further easing, which can weigh on risk assets including cryptocurrencies. Crypto market analyst Nic Puckrin linked recent precious-metals declines to perceived hawkishness, while Kraken economist Thomas Perfumo described the nomination as a mixed macro signal that may stabilize credit rather than expand it. Traders should watch FOMC pricing on CME and Fed-related commentary: easier policy typically supports crypto prices by loosening financing conditions, while tighter policy or balance-sheet reduction can reduce liquidity and pressure asset prices.
Neutral
The news is categorized as neutral because it reports a shift in rate-cut expectations but does not confirm an imminent policy change. A rise to 23% probability for a 25 bps cut signals market re-pricing and increased uncertainty, which can cause short-term volatility in crypto markets. Historically, clearer signals of easing (confirmed cuts or dovish guidance) have been bullish for risk assets and crypto, while hawkish moves or balance-sheet reduction have been bearish. Warsh’s nomination is viewed as hawkish on balance-sheet policy, which could reduce liquidity and pressure crypto prices if implemented. However, CME pricing still implies only a minority expect an actual March cut, and no large cut is priced in; that mixed signal supports a neutral stance for medium-term market direction. Traders should expect short-term volatility around Fed statements, CME rate-implied moves, and macro data (inflation, employment). Long term, actual Fed actions (cuts, hikes, or quantitative policy) will determine the trend: confirmed easing would be bullish, confirmed tightening or aggressive shrinkage of the balance sheet would be bearish.