Kevin Warsh takes the helm of the Fed under Trump's political pressure

Trump finally holds his monetary ticket, the one he waved like a rare card before the last level. Kevin Warsh has just been endorsed, and the FED changes its face under burning spotlights. The White House dreams of more docile, almost domesticated rates. Behind this banking coronation, the markets already feel the engine room heating up.

Kevin Warsh settles at the FED, Trump places his master piece

Kevin Warsh must swear in on Friday after a vote by the largely partisan Senate. He succeeds Jerome Powell, Trump’s favorite target for months. The American president has threatened Powell, criticized his high rates and hammered that the FED must loosen the screw.

In the interview picked up by NPR, Trump summarizes his grievance without varnish:

He is doing a bad job. He should cut interest rates.

Source: NPR

This arrival looks less like a quiet handover and more like a change of camp in a nervous strategy game. Elizabeth Warren has already attacked Warsh in the Senate, fearing a FED capable of offering special accounts or bailouts to Trump’s close associates.

Warsh declared over 100 million dollars in assets, including investments in AI and crypto companies. The central question thus becomes brutal: independent referee or advanced pawn on the presidential chessboard?

Trump demands low rates, but the market locks the door

Trump demands a quick easing, but the odds tell another story. On Kalshi, the chances of a rate cut before 2027 fall to 38.2%, compared to 96% in February.

The CME FedWatch shows almost 98.8% probability of status quo until the end of June. Even until July, the probability of stability remains above 94%. The political script thus bumps into the cold engine of the markets.

American inflation remains at 3.8%, well above the 2% target. 20 and 30-year Treasuries also exceed 5%, tightening financial conditions. Then, the Strait of Hormuz adds a burning layer to the oil scene.

A judge cited by NPR has already denounced the pressure exerted on Powell:

The government provided no evidence that Powell committed any crime, except displeasing the president. Abundant evidence shows the dominant purpose of the subpoenas was to harass Powell or to push him to yield.

Source: NPR

Crypto, AI, Wall Street: the “Warsh effect” enters turbulence mode

Wall Street hates command fog, especially when the FED changes captain. Speculative assets breathe poorly when liquidity dries up. Barchart recalls that bitcoin dropped 83% after Janet Yellen’s arrival, then 73% after Powell’s.

At his reconfirmation, the drop again reached 61%. The crypto market thus knows this bloody sequence.

Warsh arrives with a hawkish reputation, critical of overly loose monetary policies. Speculative AI stocks, small caps, and growth stocks thus become the fragile units on the board.

Crypto investors also monitor the CFTC, still incomplete, as the Kalshi, Polymarket, and CLARITY files await rules. In this arena, crypto does not only tremble before rates. It fears a less readable FED, regulation still under construction, and more expensive liquidity.

The numbers flashing on the terminals

• Kalshi now sees only a 38.2% chance of a cut;
• CME FedWatch anticipates 98.8% status quo;
• U.S. inflation: 3.8%, far from the target;
• Long Treasuries: sustained pressure above 5%;
• BTC price: 76,824 dollars at the time of writing.

The crypto market already receives an unfriendly signal from recent flows. Iranian tensions reportedly triggered 1.07 billion dollars in outflows, according to the reported data. Trump won his access to the monetary throne, but crypto traders discover a still mined board.