Trump wants to nominate Warsh as Fed chairman: Bloomberg – BitRss – Crypto World News

The Trump administration is preparing to nominate Kevin Warsh as the next chairman of the Federal Reserve, Bloomberg reported, citing people familiar with the matter. The selection will not be final until Trump makes a formal announcement on Friday morning.

Warsh’s anti-QE stance could reshape the liquidity environment that has supported risky assets including cryptocurrencies since 2008.

Bloomberg reports Warsh Pick

According to Bloomberg, Warsh, a former Fed governor, visited the White House on Thursday. Markets reacted quickly to the news: stocks fell, Treasury yields rose, the dollar extended its gains and precious metals fell.

Trump teased his announcement Thursday evening without naming his choice. He said it “won’t be that surprising” and “will be someone who will be known by everyone in the financial world.”

“A lot of people think this is someone who could have been there a few years ago,” he added.

Warsh is rising in the prediction markets

Earlier Thursday, the prediction markets had already shifted towards Warsh. Polymarket showed Warsh with an 87% probability on a trading volume of $289 million. Kalshi reflected similar odds of 86% on $74 million in volume.

The wave was fast. BlackRock Chief Investment Officer Rick Rieder was the odds-on favorite on Wednesday before Warsh overtook him. Economist Justin Wolfers noted at X that the White House observation alone was “enough evidence for prediction markets” to revise Warsh’s chances.

Other candidates on Trump’s shortlist include Fed Governor Christopher Waller, who disagreed with this week’s decision to keep rates steady, and Kevin Hassett, director of the National Economic Council, although Trump has indicated he would prefer to keep Hassett in his current role.

Warsh’s policy position: interest rate cuts without QE

Warsh served as Fed governor from 2006 to 2011 and has called for a structural overhaul of the central bank. Warsh has aligned himself with Trump in recent months by publicly advocating lower interest rates, a shift from his long-standing reputation as an inflation hawk.

Macro analyst Alex Krüger summarized Warsh’s views on

This mix of a flexible interest rate policy and an aggressive balance sheet policy distinguishes Warsh. Deutsche Bank’s Matthew Luzzetti wrote in December that Warsh’s preference for “lower policy rates, possibly offset by a smaller balance sheet” would require regulatory changes to work.

RSM chief economist Joseph Brusuelas was more critical. He wrote on X that Warsh’s “first instinct is aggressive” and that he “got the policy response wrong” after the global financial crisis.

Crypto implications

Warsh’s opposition to quantitative easing could put pressure on cryptocurrencies, which have historically risen alongside the expansion of the Fed’s balance sheets. The balance sheet now stands at about $6.5 trillion, down from $8.9 trillion in 2022.

His position on digital assets is nuanced. Warsh invested in the stablecoin project Basis in 2018 and in asset manager Bitwise in 2021, where he remains an advisor.

But in a 2022 WSJ op-ed, he dismissed private cryptocurrencies as “disguised as money,” writing that “cryptocurrency is a misnomer: it’s not money, it’s software.” He also supported a US central bank digital currency, a position that runs counter to Trump’s pro-Bitcoin rhetoric.

Senate confirmation uncertain

While Warsh’s nomination seems likely, its confirmation is less certain. Polymarket shows a 39% chance of passing with exactly 52 votes – the most likely scenario – while an 18% chance of an outright rejection reflects uncertainty over Senator Tillis’ looming blockade.

Source: Polymarkt

Republican Senator Thom Tillis sits on the Banking Committee. He has pledged to block any Fed nominee until the DOJ completes its investigation into Powell. The investigation focuses on the renovation costs of the Federal Reserve headquarters and Powell’s testimony in Congress. Powell has called the investigation a “pretext” to pressure him.

Powell’s term as chairman ends on May 15, although his term as governor runs until January 2028. Trump almost chose Warsh in 2018, but chose Powell instead — a decision he publicly regrets.

The Fed kept interest rates at 3.50%-3.75% on Wednesday after three cuts in 2025. Trump wants interest rates “two points and even three points lower.”

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