The proportion of traders expecting an interest-rate cut at the March Federal Open Market Committee meeting rose to 23% after concerns that President Trump’s nominee for Fed chair, Kevin Warsh, could be relatively hawkish.
CME Group’s FedWatch tool showed the probability climbed from 18.4% on Friday. Market participants placing bets on a March cut are pricing a 25 basis point reduction; no meaningful probability is being assigned to a 50 basis point or larger move.
Trump nominated Warsh in January to succeed Jerome Powell, whose term ends in May. Many observers view Warsh as more inclined to keep rates higher for longer, a stance that has unsettled markets concerned about tighter financial conditions.
Policy shifts at the Fed can affect crypto and other risk assets: easier policy and more liquidity tend to lift prices, while tighter policy and reduced financing availability can weigh on them. Crypto market analyst Nic Puckrin told Cointelegraph that Warsh’s nomination “has shaken markets to the core,” linking a late-January and early-February drop in precious metals to the perception that Warsh favors maintaining tighter policy and shrinking the Fed’s balance sheet. Puckrin cited Warsh’s comment that the balance sheet is “trillions larger than it needs to be,” warning that reduction would create a lower-liquidity environment.
Thomas Perfumo, global economist at crypto exchange Kraken, called the nomination a “mixed” macro signal: instead of implying an expansion of liquidity and credit that some in crypto hoped for, the pick may point toward stabilization rather than renewed growth in U.S. liquidity.
CME Group’s probabilities reflect market expectations ahead of the March 2026 FOMC meeting. Related coverage examines how Fed moves could influence bitcoin’s next bull market.
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