Markets now expect stability first. The Federal Reserve plans to hold rates steady. This stance likely continues through the next two meetings. Policymakers want more data. Inflation remains sticky. Growth signals weaken slowly. Therefore, caution dominates near-term decisions. However, expectations already shift forward. Traders now focus on leadership change. Sentiment no longer centers on Powell. Instead, attention moves toward Kevin Warsh.
✂️ RATE CUTS LIKELY AFTER WARSH TAKES THE CHAIR
The Fed is likely to hold rates steady for the next two FOMC meetings until June.
Markets increasingly expect easing once Kevin Warsh formally becomes Chair in May.
The FedWatch Tool now assigns a 46% chance of a 25bps cut at the… pic.twitter.com/rK1aoQ9z5H
— Coin Bureau (@coinbureau) February 3, 2026
Kevin Warsh Nomination Changes Market Outlook
Kevin Warsh enters the picture decisively. President Trump nominated him on January 30, 2026. Warsh previously served as a Fed governor. He criticized prolonged restrictive policy. He warned about growth damage. Therefore, markets expect a softer stance. Investors now anticipate faster easing. Confidence rises steadily. Policy direction feels clearer.
FedWatch Signals Growing Cut Probabilities
CME FedWatch reflects this shift clearly. Odds now show a 46% chance of a 25bps cut. This probability applies to Warsh’s first meeting. Earlier data showed lower confidence. No-change odds previously dominated. Now expectations rebalance rapidly. Traders adjust positioning. Bond yields respond. Risk assets begin pricing relief.
Liquidity Expectations Boost Risk Assets
Lower rates mean easier liquidity. Markets understand this well. Equities usually benefit first. Crypto often follows aggressively. Bitcoin historically reacts strongly. Altcoins respond even faster. Therefore, optimism builds quietly. Volatility compresses before expansion. Positioning increases gradually.
Crypto Markets Prepare for Policy Pivot
Crypto traders watch closely. Rate cuts support leverage. They reduce capital costs. They increase speculative appetite. Therefore, sentiment improves. Community discussions already reflect this shift. Many expect renewed upside. Others stay cautious. Still, macro alignment matters. Leadership change may define the next cycle.