The market is adjusting its interest rate expectations after President Donald Trump nominated Kevin Warsh to succeed Jerome Powell as Federal Reserve Chair when Powell’s term ends in May. Data from CME Group shows the probability of a rate cut at the March FOMC meeting has increased to about 23%, up from nearly 18.4% a few days ago, with a 25 basis point reduction possible.
This development reflects expectations that leadership changes could lead to more accommodative monetary policy, despite Warsh being known for his “hawkish” stance. Experts suggest that the message sent to investors is somewhat mixed: the market is betting on easing, while Warsh has previously criticized the Fed’s bloated balance sheet and supported tight liquidity. The cryptocurrency market is also adapting, with several scenarios of rate cuts this year. Some opinions suggest that Bitcoin could enter a strong rally even if interest rates remain high.
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