Trump Says New Fed Chair Will Cut Rates After Kevin Warsh Nomination

US President Donald Trump said Friday that he will nominate Federal Reserve Governor and crypto-friendly Kevin Warsh to succeed Jerome Powell as chair of the US central bank, which now sets the stage for a high-stakes Senate confirmation battle.

Jerome Powell’s leadership term ends in May, which gives Trump’s frequent Fed critic a chance to put his idea of monetary policy “regime change” into practice just as the White House pushes for more control over the setting of interest rates.

The decision by the US president, announced on Truth Social, confirmed earlier reports that Trump would move ahead with the 55-year-old ex-Fed official and Morgan Stanley banker as his preferred candidate.

The president said that he had known Warsh for a long time and had “no doubt” that he would go down as “one of the GREAT Fed chairmen, maybe the best.”

Prediction markets and Wall Street commentators had increasingly tipped Warsh as Trump’s likely choice, with odds rising sharply ahead of Friday’s announcement. 

What Trump’s Fed Pick Means For Crypto

The nomination comes during a turbulent stretch for digital assets. During this pullback, the Bitcoin price fell sharply this week from a high near $90,400 to a low of around $81,300.

BTC is down 6.5% in the last seven days to trade at $83,967 as of 11:26 p.m. EST, despite a 1.2% jump in the last 24 hours.

Historically, Fed’s decisions on interest rates have mattered for crypto, as assets tend to behave like so-called risk-on investments. When interest rates are high, safer yields such as US Treasurys become more attractive, drawing capital away from volatile assets like cryptocurrencies.

Conversely, lower interest rates increase liquidity in the financial system, often pushing investors toward higher risk bets.

Warsh is seen as more hawkish than Powell, with his past criticism of quantitative easing and the Fed’s balance sheet expansion.

Trump’s choice has been noticeably more upbeat on Bitcoin than Powell, who repeatedly played down the cryptocurrency’s significance in the economy.

However, Warsh, in a recent discussion, rejected the notion that Bitcoin would weaken the Fed’s ability to steer the economy, arguing instead that it could act as a form of market discipline.

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