Open war in the Senate over Kevin Warsh, Trump’s pick for the Fed

Since his return to business, Donald Trump has been applying his method wherever he goes. In the corridors of American finance, his “clearance” caused serious waves. First up was Gary Gensler, the man who rocked the cryptosphere. Other figures less favorable to digital assets followed suit. It left Jerome Powell, the anti-rate-cut, the one who kept resisting. Trump is sending his successor to the Senate today. Proudly pro-Bitcoin Kevin Warsh will have to face a legislative trial by fire.

Trump’s bet: Kevin Warsh, the first pro-Bitcoin to head the Fed

First, the gesture of replacing the Federal Reserve as number one is eminently political. Trump officially sent Kevin Warsh’s nomination to the Senate on March 4, 2026. Four years as Fed Chair, fourteen years as Governor. The goal is clear: to replace Jerome Powell on May 15, the end of his term.

Furthermore, Warsh’s profile definitely stands out from the average central banker. A lawyer by training, he sat on the Fed from 2006 to 2011 under Bush and then Obama. He went through the subprime crisis alongside Ben Bernanke without losing ground. Now a researcher at Stanford, he frequents conservative circles without making media waves.

But his statements about Bitcoin caught the attention of crypto investors around the world. In 2021, on CNBC, he launched a catchphrase that has become famous in the industry: “If you’re under forty, Bitcoin is your new gold“.

In a 2025 interview at the Hoover Institution, he hammered home with calm and decisive assurance:

Bitcoin doesn’t make me nervous. I see this as an important asset that can help inform policy makers when they are doing things right or wrong.

Never before has a central banker spoken of the cryptocurrency queen like this.

The Senate, a battleground between Republicans and Democrats

However, Warsh’s path towards the Fed is an obstacle course strewn with pitfalls. The Senate Banking Committee must first hear it at length, then vote on its confirmation in the House of Representatives. But obstacles are piling up before him at an alarming rate.

On the democratic side, hostility is open and uncompromising. Elizabeth Warren, the most feared senator in Washington, has already called him “Donald Trump’s puppet at the Fed.”

Chuck Schumer, the minority leader, demands that he solemnly swear to preserve the monetary institution’s independence. Even more surprising is that a Republican is throwing a spanner in the works. Thom Tillis of North Carolina is threatening to block any nomination until the Justice Department’s investigation of Powell is concluded. That investigation involves a $2.5 billion renovation of the Fed building.

Without Tillis’ valuable vote, the Republican majority means very little. The committee meeting promises to be particularly explosive.

Rates, Inflation and Geopolitics: The Headache Awaiting the Next Fed Chair

In addition to the political squabbles, Warsh will have to face a complex and changing economic reality. He wants to cut rates, as Trump has been insisting for months. His main argument is based on artificial intelligence and its promises. According to him, the productivity gains associated with AI will reduce costs without reigniting inflation.

Fed economists, however, do not share this exuberant and risky optimism. They see AI as too slow to produce concrete effects on the real economy. In addition, the five-day-old conflict in Iran is driving oil prices higher. A veritable inflation bomb, already stubborn and closely watched.

Meanwhile, markets are no longer betting on a rate cut until July at the earliest. Warsh will also have to manage Powell’s unwieldy legacy: $6.5 trillion in assets on the balance sheet. That’s 4 trillion more than in 2011 when he left the Fed. Anyone who hates quantitative easing can sell assets.

But cutting rates when selling means pulling left and right at the same time. No one has ever tested this risky combination in monetary history.

Key figures of the game-changing nomination

• May 15, 2026: Jerome Powell’s term as Fed Chair ends;
• 6.5 trillion: assets held by the Fed, up 4 trillion from 2011;
• $72,425: Current BTC Price, Trial Amid Political Uncertainty;
• 2.5 billion: the amount to renovate the Fed building at the center of the Justice Department investigation.

Trump’s political promises are no longer enough to optimize the current situation. The former advisor to the president believes that concrete steps must now be taken in the area of ​​the economy. Warsh’s nomination is only the first step, certainly an important and symbolic one. But without tangible results, market enthusiasm risks waning.

DISCLAIMER OF LIABILITY

The views, thoughts and opinions expressed in this article are solely those of the author and should not be taken as investment advice. Before making any investment decision, do your own research.