New Fed Chair Kevin Warsh May Cut Interest Rates Despite Market Expectations

Newly appointed Federal Reserve Chairman Kevin Warsh may cut interest rates in 2026 despite growing expectations for hikes, according to market analyst and Bitcoin investor Lawrence Lepard.

Lepard argued that comments from White House economic officials suggest a more supportive monetary policy may be ahead. He pointed to signals from Kevin Hassett and Treasury Secretary Scott Bessent as reasons to expect lower rates rather than increases.

Warsh Could Use Inflation and AI Productivity Arguments

According to Lepard, Warsh may justify rate cuts by highlighting improvements in artificial intelligence-driven productivity and cooling inflation. He also suggested Warsh could describe inflation linked to geopolitical conflicts as temporary or “transitory.”

During Warsh’s swearing-in ceremony, Donald Trump said the United States would address rising national debt through economic growth, a statement many investors interpreted as support for easier monetary policy and lower borrowing costs.

Markets Still Expect Interest Rate Hikes

Despite those views, traders continue to expect higher rates. Data from the Chicago Mercantile Exchange FedWatch Tool shows nearly 68% of traders expect at least a 25-basis-point rate hike by December 2026.

Crypto Markets Watching Fed Direction

Warsh’s approach to monetary policy remains closely watched by crypto investors, as lower interest rates often support higher prices for risk assets like Bitcoin and cryptocurrencies. However, uncertainty around Federal Reserve policy may keep financial markets volatile in the coming months.