The White House is preparing for a major personnel move that could influence U.S. monetary policy and global financial markets. President Donald Trump is expected to announce the nomination of a new chair of the U.S. central bank on Friday. According to U.S. media, the role is set to go to Kevin Warsh, an economist known for his hawkish stance on inflation as well as his unexpectedly favorable view of bitcoin.
U.S. President Donald Trump has confirmed that he will announce his candidate for the position of Chair of the Federal Reserve on Friday morning. The current Fed chair, Jerome Powell, is set to step down in May as his term comes to an end. According to information from Bloomberg, The Wall Street Journal, and The New York Times, Trump’s choice has fallen on Kevin Warsh.
Warsh previously served in the leadership of the Federal Reserve, holding the position of Fed governor from 2006 to 2011. Reuters had earlier reported that Trump met with Warsh in person on Thursday. According to a source familiar with the meeting, Warsh made a strong impression on the president.
Markets Have Made Up Their Minds
The likelihood of Warsh’s nomination has also surged sharply on prediction markets. On the Polymarket platform, his chances jumped from 30% to 95% within a short period of time. The previous favorite, BlackRock investment manager Rick Rieder, fell to around 3.4%.
Data from the Kalshi platform tell a similar story, with Warsh showing a 93% probability of nomination. Rick Rieder stands at approximately 5%, while economist Kevin Hassett is at around 2%.
Financial markets reacted immediately to the expected nomination. The U.S. dollar strengthened and government bond yields rose, reflecting expectations of a tighter monetary policy.
A Hawk at the Helm of the Fed
Kevin Warsh is widely viewed as a so-called hawk, meaning a proponent of a stricter monetary policy. If appointed, analysts expect him to push for fiscal restraint, a tougher fight against inflation, and a gradual exit from quantitative easing, a policy that has significantly expanded the Fed’s balance sheet in recent years.
This approach sets him apart not only from Jerome Powell but also from other potential candidates. For investors, it could mean tighter financial conditions, higher interest rates for longer, and lower tolerance for budget deficits.
Bitcoin as a “Policeman of Policy”
One notable aspect of Warsh’s profile is his stance on cryptocurrencies, particularly bitcoin. His view is considerably more favorable than that of the current Fed leadership, which has tended to downplay the role of cryptocurrencies in the U.S. economy.
In a July interview with the Hoover Institution, Warsh dismissed concerns that bitcoin could undermine the central bank’s ability to manage the economy. On the contrary, he argued that it could serve as a form of market discipline.
“Bitcoin doesn’t worry me. I see it as an important asset that can show policymakers when they are doing things right and when they are doing things wrong,” Warsh said at the time. According to him, bitcoin can function as a “very good policeman of economic policy,” highlighting excessive debt or overly loose fiscal discipline.
What It Means for Investors
If Trump officially announces Warsh’s nomination on Friday, it would represent one of the strongest signals yet toward a tighter monetary policy in the coming years. For investors, this could mean pressure on equity markets, while supporting the dollar and higher-yielding bonds. It will also be worth watching whether the Fed’s approach to cryptocurrencies and their role in the broader financial system changes.
