Donald Trump said he will announce his nominee to replace Federal Reserve chair Jerome Powell on Friday morning, with prediction markets pointing strongly toward former Fed governor Kevin Warsh.
Prediction markets surged in favour of Kevin Warsh after a White House visit on Thursday, with Polymarket pricing his chances at 87% and Kalshi showing similar odds.
“I’ll be announcing the Fed chair tomorrow morning,”
Trump said, adding that the pick would be “someone known to everyone in the financial world” and “somebody that could’ve been there a few years ago.”
Warsh’s potential return to the Fed has drawn attention for his opposition to quantitative easing, a stance analysts say could tighten liquidity conditions that have supported risk assets including cryptocurrencies.
He has argued that AI-driven productivity allows for lower interest rates while insisting the Fed’s balance sheet should shrink, a policy mix that would mark a sharp shift from post-2008 monetary strategy.
Confirmation is not guaranteed, with Republican senator Thom Tillis vowing to block any vote until the Justice Department concludes its probe into Powell, according to public statements.
The Fed held rates at 3.50%–3.75% this week after three cuts in 2025, but Trump has said he wants rates “two points and even three points lower,” raising the stakes around his imminent choice.