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President Donald Trump said Thursday that he will announce his pick to replace Federal Reserve Chairman Jerome Powell on Friday morning, ending months of speculation about who will lead the world’s most powerful central bank.
Frontrunner Kevin Warsh’s anti-quantitative easing stance may reshape the liquidity environment that has boosted risk assets, including cryptocurrencies, since 2008.
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Trump suggests an announcement on Friday
Trump said At the Kennedy Center Thursday night: “I will announce the chairman of the Federal Reserve tomorrow morning.” He hinted that the selection “will not be much of a surprise” and will be “a person known to everyone in the financial world”. The president added: “A lot of people believe that this is someone who could have been here many years ago.”
Warsh highs in forecast markets
Former Federal Reserve Governor Kevin Warsh stands out As an obvious candidate After a visit to the White House on Thursday. Market expectations have changed dramatically. PolyMarket showed Warsh with a probability of 87% on a trading volume of $289 million. Calci reflects a similar probability of 86% on the sales volume of $74 million.
The race was fast. Rick Reeder, BlackRock’s chief investment officer, was the favorite until Wednesday before Warsh ousted him. Economist Justin Wolfers noted at the X Program that the White House observation alone was “enough evidence for the prediction markets” to raise Warsh’s odds.
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Other candidates on Trump’s short list include Federal Reserve Governor Christopher Waller, who opposed this week’s decision to keep family rates steady, and National Economic Council Director Kevin Hassett, although Trump has indicated he would prefer to keep Hassett in his current position.
Warsh’s policy stance: Lower interest rates without quantitative easing
Warsh served as Federal Reserve Governor from 2006 to 2011 and called for structural reform of the central bank. Macro analyst Alex Krueger sums it up Warsh’s attitudes Regarding
This combination of narrow interest politics and a tough budget stance sets Warsh apart. Deutsche Bank’s Matthew Luzetti wrote in December that Warsh’s preference for “lower interest rates and perhaps a smaller balance sheet size” would require regulatory changes to pick up.
RSM’s chief economist was Joseph Brusuelas More critical. He wrote on the website
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Implications of digital currencies
Warsh’s opposition to quantitative easing could put pressure on cryptocurrencies, which have historically risen as the Federal Reserve’s balance sheet unfolds. The budget is now about $6.5 trillion, up from $8.9 trillion in 2022.
Its position on the digital axis is nuanced. Warsh invested in the stablecoin project Basis in 2018 and in asset manager Bitwise in 2021, where he remains an advisor.
However, in An opinion piece in the Wall Street Journal in 2022dismissed private cryptocurrencies as “pretending to be money”, writing that “cryptocurrency is a misnomer—it’s not money, it’s software”. He has also supported a US central bank digital currency, a position that contradicts Trump’s pro-bitcoin rhetoric.
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Senate confirmation uncertain
While Warsh’s nomination seems likely, confirmation is less certain. Polymarket appears A 39% chance of passage by exactly 52 votes – the most likely scenario – while an 18% chance of outright rejection reflects uncertainty over Senator Tillis’ threat of a siege.
Republican Senator Thom Tillis, a member of the Banking Committee, has vowed to block any Fed nominee until the Justice Department concludes its investigation into Powell. The investigations are focused on the renovation costs at the headquarters of the Fed and Powell’s testimony, which he described as a “pretext” for pressure.
Powell’s term as president expires on May 15, although his term runs through January 2028. Trump nearly picked Warsh in 2018, but chose Powell instead — a decision he publicly regrets.
The Federal Reserve kept interest rates at 3.50%-3.75% on Wednesday after three cuts in 2025. Trump wants rates “two, even three points lower.”
