- Trump may announce the next Fed Chair as soon as next week, Bessent says.
- Prediction markets favor Kevin Warsh as traders position ahead of the Fed decision.
- Bitcoin traders brace for volatility as Fed policy signals come into focus.
The race to replace Fed Chair Jerome Powell is heating up, and markets are watching closely. Treasury Secretary Scott Bessent says President Donald Trump could announce the next Fed Chair as soon as next week, a move that may impact both traditional markets and Bitcoin in the short term.
Fed Chair Decision Nears
Speaking at the World Economic Forum in Davos, Bessent said the administration has narrowed the search to four candidates and could announce a decision sooner than expected.
With Powell’s term ending in May 2026, an early pick would act as a “shadow Fed Chair,” influencing investor expectations well before the official handover.
Notably, the final shortlist includes BlackRock’s Rick Rieder, NEC Director Kevin Hassett, Fed Governor Christopher Waller, and former Fed Governor Kevin Warsh. Hassett was once seen as the top choice, but Trump has hinted he may want to keep him in his current role as a leading economic voice.
Meanwhile, political pressure on the Fed has added uncertainty. A subpoena tied to Powell’s testimony on renovations has triggered backlash in Washington and could complicate confirmation for any nominee.
In this environment, Rick Rieder is reportedly gaining traction, with some insiders seeing him as the easiest candidate to confirm.
Kevin Warsh Leads Prediction Markets
Despite the political uncertainty, prediction markets are favoring Kevin Warsh. On Polymarket, he holds about a 62% chance of being nominated, suggesting traders believe Trump may lean toward him.
Warsh served as a Fed governor from 2006 to 2011 and is known for a hawkish approach, prioritizing inflation control even at the risk of slower growth.
A hawkish Fed Chair usually supports a stronger US dollar and can pressure stocks by keeping interest rates higher. For crypto, the impact is mixed.
In the short term, Bitcoin and other risk assets could see more volatility as markets price in tighter conditions. Over the longer term, some investors may see crypto as a hedge against policy uncertainty and inflation.
Even speculation around Warsh is already shaping market positions, as traders try to anticipate future Fed policy early.
Why Bitcoin Traders Are Watching Closely
Essentially, Bitcoin has become more sensitive to macro factors, especially interest rates and liquidity. A dovish Fed Chair could boost crypto, while a hawkish choice may slow momentum, at least in the short term.
Trump’s recent calls for rate cuts contrast with the possibility of tougher Fed leadership, adding uncertainty. If a pick is announced as soon as next week, markets are likely to react fast.
For Bitcoin traders, the focus won’t just be on the name chosen, but on what it signals for future US monetary policy. As Powell’s exit approaches, the Fed Chair decision is shaping up to be a key macro story for crypto in the months ahead.
Related: Bitcoin Two-Month Highs at Risk Amid Tariff and Fed Shocks
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