Market win rate forecast soars above 80%! Bloomberg: Trump will nominate Whash to succeed as Fed Chair

Is the Federal Reserve (Fed) about to usher in the “Hauck Era”? According to Bloomberg, citing informed sources, the Trump administration is preparing to nominate former Fed director Kevin Warsh to be the next Fed Chair. Although the official candidate has yet to be announced by Trump tonight (30th), this news has already caused a storm in the financial markets. The market is highly focused on Warsh’s clear stance against quantitative easing (QE), which could reshape the liquidity environment that has supported stocks and risk assets like cryptocurrencies since the 2008 financial crisis. Bloomberg pointed out that Warsh visited the White House on Thursday, a move that immediately ignited market nerves. Following the news, U.S. stocks declined, Treasury yields rose, the dollar continued to strengthen, and precious metals came under broad pressure. Earlier today (30th), Trump was somewhat coy in an interview, saying the Fed’s new chairman “won’t be too surprising,” and that the person is “a household name in the financial world,” even outright stating, “Many people think this person should have been in that position years ago.” In fact, before the White House move was exposed, the market had already sniffed out the trend. Decentralized prediction platform Polymarket showed Warsh’s nomination probability spiked to 87%, with trading volume reaching as high as $289 million; another platform, Kalshi, also indicated similar figures, with an 86% chance of success and about $74 million in trading volume. Interestingly, just the day before yesterday, BlackRock’s Chief Investment Officer Rick Rieder was the most favored candidate, but with Warsh appearing at the White House, market predictions instantly flipped. Other contenders like current Board member Christopher Waller and National Economic Council Director Kevin Hassett saw their momentum significantly decline. Warsh served as a Federal Reserve Board member from 2006 to 2011 and has long advocated for structural reforms to the central banking system. Recently, his stance has subtly shifted—publicly calling for interest rate cuts, aligning with Trump’s policy positions, which has led markets to reevaluate his previous image as an “inflation hawk.” Macro analyst Alex Krüger summarized Warsh’s core views on X, noting: “Warsh believes that productivity gains driven by AI have a deflationary effect, enough to support significant rate cuts; at the same time, he criticizes the Fed’s balance sheet as ‘subsidizing Wall Street,’ and advocates for a substantial balance sheet reduction.” This “dovish on rates, hawkish on balance sheet” policy combination makes Warsh stand out among the candidates. For crypto enthusiasts, Warsh’s role is quite nuanced. He was an early investor in the stablecoin project Basis and has been an advisor to crypto asset management giant Bitwise since 2021. However, in a 2022 Wall Street Journal article, he openly stated that private cryptocurrencies are “hollow,” criticizing cryptocurrencies as not true money, at best just “software.” What worries the community even more is that he has expressed support for the issuance of a Central Bank Digital Currency (CBDC) in the U.S., which is completely at odds with Trump’s stance of “supporting Bitcoin and opposing CBDC.” Even if Trump’s nomination is completed, Warsh’s hold on the chairmanship is still uncertain. Republican Senator Thom Tillis has made a “military order,” emphasizing that he will use his power to block any Fed appointments until the Department of Justice concludes its investigation into current Chair Jerome Powell. This investigation stems from a controversy over overspending on the Fed headquarters renovation. While Powell claims this is an “excuse” to pressure him out, Tillis’s banking committee has veto power. Currently, market predictions suggest that Warsh has the highest chance of passing with 52 votes (about 39%), but there is also an 18% chance of failure due to Senate opposition.