In a notable shift in the race for the Federal Reserve Chair position, Kevin Warsh has surged ahead of Rick Rieder in odds on the prediction market platform, Polymarket. As Donald Trump prepares to announce his selection for the role, Warsh”s probability of being chosen has skyrocketed to 85%, while Rieder”s has plummeted to just 7%. This marks a significant reversal, given that Rieder was previously viewed as the frontrunner earlier this week.
Trump confirmed that he would make the announcement on Friday morning. Historically, Polymarket”s odds have proven to be reliable predictors for major events, including significant announcements like the Nobel Peace Prize in 2025.
Kevin Warsh is an experienced economist with a background at the Federal Reserve, where he served as a governor from 2006 to 2011. He currently holds a position as a visiting fellow at the Hoover Institution. If appointed, he would succeed Jerome Powell, who was nominated by Trump during his first term. Observers anticipate that Warsh”s tenure would reflect Trump”s inclination toward maintaining low interest rates. Recently, Trump criticized Powell, labeling him a “moron” for not implementing rate cuts during the Fed”s last meeting.
Despite the focus on Warsh, there remains uncertainty regarding his influence over interest rates at the Federal Reserve. During a recent meeting, other officials, including Stephen Miran and Christopher Waller, advocated for cutting rates, but the majority opted to keep them steady in the range of 3.50% to 3.75%. As such, even if Warsh were to vote in favor of cuts, it may not be sufficient to drive a change in policy.
Interestingly, while Warsh is often categorized as a pro-crypto economist, his critiques of the cryptocurrency sector suggest a more cautious stance compared to Rieder. In 2018, he expressed concerns about Bitcoin”s volatility in an opinion piece for the Wall Street Journal and has criticized various aspects of the crypto industry, including stablecoins. Nevertheless, the role of the Federal Reserve Chair is somewhat limited in direct influence over the crypto market, as regulatory oversight primarily falls under agencies such as the SEC and the CFTC.
Typically, the impact of a dovish Federal Reserve on cryptocurrency prices is through interest rate adjustments, with lower rates often correlated with increased investment in digital assets. As the situation evolves, stakeholders in the cryptocurrency space will be keenly watching how Warsh”s potential appointment could shape the Fed”s approach to monetary policy and its indirect effects on the broader crypto market.
