Warsh surges in Fed‑chair markets as Hassett falters, raising rate‑policy uncertainty
Donald Trump has narrowed his apparent front‑runners for the next Federal Reserve chair to Kevin Warsh and Kevin Hassett, but internal pushback on Hassett has shifted nomination odds sharply toward Warsh. Reports say advisors worry Hassett’s close ties to Trump could read as a political ‘puppet’ and unsettle bond markets, pushing long‑term yields higher—opposite Trump’s preference for lower rates. Prediction markets reacted: Polymarket and Kalshi moved Warsh’s probability into the high‑40% range while Hassett’s fell from prior highs (Kalshi earlier showed Hassett as high as ~81%). Current Fed Chair Jerome Powell’s term ends May 2026 and a formal nomination is expected in early 2026. For traders, this development raises policy uncertainty: a Warsh nomination (favored by some for quicker rate cuts) or a perception of political capture with Hassett could meaningfully shift interest‑rate expectations, increase volatility in rates and risk assets, and spill over into macro‑sensitive markets including cryptocurrencies. Key keywords: Federal Reserve, Fed chair, Kevin Warsh, Kevin Hassett, prediction markets, bond market, interest rates, monetary policy.
Neutral
The nomination contest between Kevin Warsh and Kevin Hassett increases uncertainty around U.S. interest‑rate policy, which can affect crypto prices through macro channels. Short term: elevated volatility is likely in rates and risk assets (including crypto) as markets reprice Fed path probabilities when prediction markets and political signals shift. That tends to produce sharp but direction‑agnostic moves—crypto may fall on a bond‑market risk‑off spike or rise if markets price in faster easing. Medium to long term: the chosen Fed chair’s policy stance matters—Warsh has been associated with views favoring earlier cuts by some reports, which could be supportive for risk assets if markets take that view; whereas concerns of political capture (Hassett) could raise term premia and weigh on risk appetite. Overall impact is nuanced and contingent on how nomination advances and market interpretation; therefore classify as neutral for crypto price direction but expect increased volatility and correlation with rates markets.