US President Donald Trump officially announced his nomination of Kevin Warsh as the new chairman of the Federal Reserve (Fed). Trump shared the name of the successor to current Fed Chairman Jerome Powell, whose term ends in May, with the public on Friday. The nomination confirms market expectations that have been gaining momentum in recent days and is being closely followed in the financial and cryptocurrency markets.
Trump made a statement on the matter
In a post on Truth Social, Trump reminded that Warsh previously served on the Fed Board of Governors, worked as a researcher at the Hoover Institution, and taught at Stanford University's Business School. He also emphasized that Warsh served as a partner in the Duquesne Family Office with renowned investor Stanley Druckenmiller. Trump stated, "I have known him for a long time, and I have no doubt that we will remember him as one of the best chairmen of the Fed."
Warsh, 55, served on the Federal Reserve Board of Governors from 2006–2011 under George W. Bush and Barack Obama. Previously a banker at Morgan Stanley, Warsh is a well-known figure in Washington's economic policy circles. While Trump's official nomination has ended weeks of uncertainty, Warsh still needs to pass the Senate confirmation process to take office. Following confirmation, Warsh could replace Powell for a four-year term. Prior to the nomination announcement, there was significant activity in the prediction markets. On Thursday night, the probability of Warsh becoming Fed chairman rose to 95% on Polymarket, with similar rates seen on Kalshi. This sharp rise occurred as signals strengthened that Trump would announce his nomination.
What is Warsh's stance in the crypto space?
Warsh's background is also noteworthy from the perspective of the crypto markets. Warsh previously invested in Basis, an algorithmic stablecoin project, and advised Electric Capital, a venture capital firm focused on crypto and blockchain. He is also associated with Bitwise, a crypto index manager, as an investor and advisor. However, Warsh maintains a cautious approach to digital assets. In a speech last year, he stated that he does not see Bitcoin as an alternative to the dollar, but that it could be an important signaling tool for policymakers. On the monetary policy side, Warsh is generally considered a "hawk." During his previous tenure at the Fed, he frequently emphasized inflation risks and was critical of quantitative easing policies and the expansion of the Fed's balance sheet. More recently, he has argued that AI-driven productivity increases could alleviate inflationary pressures, suggesting that interest rate cuts could be considered under certain conditions. Trump's shortlist previously included names like Kevin Hassett, Christopher Waller, and Rick Rieder. However, the clear shift in favor of Warsh in the final hours has formalized his nomination. Now all eyes are on the Senate confirmation process and how Warsh will steer the Fed's monetary policy in balancing inflation, growth, and financial innovation.
