Warsh-Led Fed Scenarios May Break Crypto Rangebound Trading
Crypto markets may shift from rangebound trading to breakouts driven by macro liquidity shifts. This outcome depends on the policy path chosen by the next Federal Reserve chair. President Donald Trump nominated Kevin Warsh to succeed Jerome Powell, whose term expires on May 15. The Senate Banking Committee has scheduled a confirmation hearing for April 21. Senator Thom Tillis intends to block confirmation until a Department of Justice investigation involving Powell is resolved. Under a baseline scenario called 'The Grind,' interest rates remain within the 3.25% to 3.75% range through year-end 2026. A 'Soft Pivot' scenario envisions two to three rate cuts totaling up to 75 basis points. A more aggressive 'Run It Hot' scenario combines faster rate reductions with looser balance sheet policies. These varying degrees of policy easing and liquidity conditions shape investor positioning in risk assets.
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