Economist: Kevin Warsh may cut interest rates sharply and quickly, exceeding market expectations

2026-02-03 10:21:22

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Economist Robin Brooks, senior fellow at the Brookings Institution, believes that the Fed chair candidate nominated by President Donald Trump – Kevin Warsh – could cut interest rates more quickly and aggressively than market expectations. According to the latest analysis released on Tuesday, Brooks forecasts the Fed could cut a total of 100 basis points in four meetings in June, July, September, and October, far exceeding the approximately 40 basis points currently priced in by the market.

If this scenario occurs, the Fed’s policy rate could drop from the 3.5%–3.75% range to 2.5%–2.75% before the midterm elections in November. Brooks considers this a “restructuring” of monetary policy, acknowledging a lower neutral interest rate, thereby exerting downward pressure on the USD.

A decisive rate cut forecast could also trigger a new rally in Bitcoin and the cryptocurrency market after a period of volatility driven by concerns that the Fed will maintain a “hawkish” stance under Warsh.

BTC-2,6%

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