Kevin Warsh is set to take over the Federal Reserve as traders lower their expectations for rate cuts before the next policy meeting.
Summary
- Kevin Warsh enters the Fed as traders sharply cut expectations for 2026 rate relief ahead.
- CME and Kalshi data show markets now expect rates to stay higher for longer ahead.
- CFTC staffing worries grow as CLARITY Act could expand crypto oversight before new appointments arrive.
Warsh is set to be sworn in as Federal Reserve chair on Friday after the U.S. Senate confirmed him in a 54-45 vote. He replaces Jerome Powell as chair, while Powell stays on the Board of Governors.
Warsh enters the role at a tense time for monetary policy. President Donald Trump has repeatedly pushed the Fed to lower borrowing costs, but market pricing now points to a low chance of quick easing. Reuters reported that Warsh will face inflation pressure, a divided Fed, and a June meeting that may test his early policy stance.
Fed rate-cut odds fade before June meeting
The rate-cut picture has changed fast. Kalshi figures cited in the source text showed a 38.2% chance of a rate cut before 2027, down from 96% in February. CME FedWatch showed a 98.8% chance of no rate move through June and more than 94% odds of no change through July. CME says its FedWatch tool tracks rate probabilities based on 30-day Fed Funds futures.
The Fed’s official calendar lists the next FOMC meeting for June 16-17. That meeting includes a Summary of Economic Projections, which may force Warsh to show where he stands on rates.
The market setup matters for Bitcoin and crypto because higher rates can keep dollar liquidity tight. Recent crypto.news coverage said Treasury yields had already moved higher before Warsh’s first days, with the 30-year yield near 5.07% and the 10-year around 4.53%.
Crypto markets watch Fed independence concerns
Warsh’s confirmation has raised questions about Fed independence. At his Senate Banking Committee hearing, Sen. Elizabeth Warren warned that a Fed under Trump’s control could mean “granting special accounts to his family’s crypto company or bailouts to his friends on Wall Street if they get into trouble.”
Those remarks linked the Fed chair change to wider crypto policy concerns. crypto.news has also tracked the Warsh story for months, including his confirmation, the market reaction after Trump picked him, and the way higher-for-longer Fed policy has weighed on Bitcoin and other risk assets.
CFTC vacancies add another crypto policy test
The Fed shift comes as lawmakers press Trump to fill open seats at the Commodity Futures Trading Commission. House Agriculture Committee leaders Glenn “GT” Thompson and Angie Craig sent a May 15 letter asking the president to nominate a full bipartisan panel.
As previously reported, the letter said the CFTC faces urgent issues, including market volatility, new technology, and possible spot digital commodity oversight under the CLARITY Act. The lawmakers wrote that the agency would work best with a full five-member commission.
