1. Who is Kevin Warsh?

- Leading candidate for the FED Chair: As of January 2026, he has a 95% chance of becoming the next FED Chair and has reportedly met with President Trump at the White House.
- Extensive experience: He was the youngest person to serve as a FED Governor at age 35, has worked at Morgan Stanley, and served as an economic advisor to President Bush.
- Powerful connections: He is the son-in-law of the Estée Lauder family. His father-in-law is a close friend and major donor to Trump, giving him an advantage in accessing power.

2. Economic Views & Monetary Policy (If in power)

- Hawk or Dove?: Historically, he has been a "hawk," prioritizing inflation control and resigning in opposition to quantitative easing. Recently, he has shifted to support interest rate cuts, aligning with Trump’s preferences.
- "Paradoxical" strategy: He believes inflation is caused by excessive money supply from the FED. He proposes a unique approach: cutting interest rates while simultaneously shrinking the balance sheet (removing money from the system).
- Loss of independence?: Warsh wants the FED to work closely with the Treasury and consult the President on interest rates, moving away from its previous independent stance.

3. Impact on the Crypto Market

- Positive aspect: He has previously invested in crypto projects and views Bitcoin as a "sustainable store of value, similar to gold." His support for low interest rates is also favorable for capital inflow into crypto.
- Negative aspect (Risk): He is skeptical about Bitcoin as a payment method, considering it "software." Most concerning, Warsh supports the development of a central bank digital currency (CBDC), which contradicts Trump’s anti-CBDC stance and could compete with stablecoins.

4. Important Timeline

- May 2026: Jerome Powell's term ends, and the new FED Chair will take office.
- Second half of 2026: The new policies from the incoming Chair will significantly impact market capital flows.