Kevin Warsh, who was sworn in as the chairman of the United States Federal Reserve on Friday, will likely slash interest rates, despite the “consensus” view that he will raise interest rates, according to author, Bitcoin investor and market analyst Lawrence Lepard.
Lepard said that comments from other US officials, including Kevin Hassett, the director of the White House National Economic Council, and Treasury Secretary Scott Bessent, support the likelihood of rate cuts in 2026. He added:
“Warsh will cut. He will use the AI productivity and trimmed inflation excuses and will claim that all the war inflation is transitory. Two data points from today's Wall Street Journal support this view.”
Source: Lawrence Lepard
During Warsh’s swearing-in ceremony on Friday, US President Donald Trump said that the US would tackle its rising national debt through “growth,” signaling an expansion of the monetary supply and a lower interest rate regime.
Investors, traders, and analysts continue to debate about Warsh’s impact on interest rate policy and whether he will cut interest rates, which would boost risk-on asset prices, including Bitcoin and crypto.
Related: Odds against rate cuts high as new US Fed chair set for swearing in
Traders forecast rate hikes in 2026, as uncertainty mounts over new Fed chair
Nearly 68% of traders have priced in an interest rate hike of 25 basis points (BPS) or more by December 2026, according to the Chicago Mercantile Exchange (CME) Group’s FedWatch tool.
“We want to stop inflation, but we don't want to stop greatness,” Trump said on Friday, which was met with skepticism from investors, economists and market analysts.
Kevin Warsh gives his acceptance speech at his swearing-in ceremony on Friday. Source: The White House
In April, US lawmakers scrutinized Warsh’s commitment to preserving Federal Reserve independence, casting doubt on whether Warsh would resist pressure from the Executive Branch to loosen monetary policy.
Senator Elizabeth Warren said that Warsh’s appointment could create potential conflicts of interest, in which the Trump family’s crypto businesses benefit from policies enacted by the new Fed chair.
Meanwhile, Bitcoin, crypto and stock investors could face several months of declining asset prices following the Fed’s leadership transition, as uncertainty over interest rate policy grows.
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