Trump narrows Fed chair to Kevin Warsh and Kevin Hassett, boosting Warsh odds
President Donald Trump has narrowed his shortlist for Federal Reserve chair to two finalists: former Fed governor Kevin Warsh and White House economic adviser Kevin Hassett. Trump signalled he wants a chair who will pursue lower interest rates and coordinate more with the White House, a stance that could weaken Fed independence. Markets and betting platforms reacted sharply: Warsh’s odds jumped from roughly 12% to over 38% after Trump publicly named “the two Kevins,” while Hassett remains the favourite. Traders interpret either appointment as increasing the probability of faster and deeper rate cuts in 2026; some market indicators now price multiple cuts next year. Wall Street figures, including Jamie Dimon, have expressed support for Warsh, adding momentum to his market-implied probability. Critics warn political pressure for rapid cuts could raise inflation risks and undermine central-bank credibility. Other names (Christopher Waller, Michelle Bowman, Rick Rieder) remain under consideration. Key market impacts for traders to watch: shifts in betting markets, US Treasury yields, dollar strength, volatility around Fed guidance and the nomination, and how these macro moves could flow into crypto risk assets ahead of a nomination expected before Jerome Powell’s term ends in May 2026.
Bullish
A Fed chair perceived as committed to faster and deeper interest-rate cuts (Warsh or Hassett, per Trump’s shortlist) is typically positive for risk assets, including major cryptocurrencies. Lower interest rates reduce the opportunity cost of holding non-yielding assets like BTC and ETH and can support higher liquidity and risk-taking. The market reaction — rising odds for Warsh, shifts in Treasury yields and dollar flows — suggests traders are already pricing easier monetary policy, which tends to be bullish for crypto in both the near term (reduced volatility spikes on rate-tightening fears, liquidity-driven rallies) and medium term (higher risk appetite and capital inflows). However, risks remain: political pressure on the Fed could lead to higher inflation expectations and policy uncertainty, which can increase volatility and intermittent sell-offs. Overall, the immediate directional effect is bullish for crypto prices, but traders should monitor Treasury yields, dollar strength, and volatility around the nomination and subsequent Fed guidance for short-term pullbacks.