Kevin Warsh, sworn in Friday as chair of the U.S. Federal Reserve, is likely to cut interest rates despite a widespread expectation he would tighten policy, according to market analyst and Bitcoin investor Lawrence Lepard.
Lepard pointed to recent comments from other U.S. officials — including White House NEC director Kevin Hassett and Treasury Secretary Scott Bessent — as evidence that rate cuts in 2026 are increasingly plausible. He argued Warsh could justify easing by highlighting AI-driven productivity gains and calling recent inflationary pressures transitory.
At his swearing-in, President Donald Trump signaled a focus on reducing the national debt through growth, language some observers read as consistent with a looser monetary stance and lower rates ahead. That rhetoric, combined with commentary from administration advisers, has fueled debate about the Fed’s future direction under Warsh.
Despite these signals, market-implied odds still lean toward higher rates: CME Group’s FedWatch tool shows nearly 68% of traders have priced in at least a 25 basis-point hike by December 2026. Uncertainty about Warsh’s policy path has left investors split on whether the next moves will be hikes or cuts.
Warsh’s nomination and confirmation were also scrutinized by lawmakers concerned about Federal Reserve independence. During hearings, Senator Elizabeth Warren warned about potential conflicts of interest and raised questions about whether policies could disproportionately benefit businesses connected to the Trump family, including in the crypto space.
Analysts warn that the transition in Fed leadership could produce volatility for risk assets. Bitcoin, other cryptocurrencies and stocks may face a period of weakness as markets digest conflicting signals on monetary policy and weigh the timing and direction of any future rate moves.
Cointelegraph continues to report independently and transparently. This article was prepared in accordance with Cointelegraph’s editorial policy; readers are encouraged to verify details independently.