Following Kevin Warsh's official announcement, his outlook on US monetary policy remains positive: two rate cuts are still expected, with a weaker dovish stance.

On January 30th, just after Trump announced his nomination of Kevin Warsh as Chairman of the Federal Reserve, traders continued to price in two Fed rate cuts this year. Several US financial institutions released their outlooks on US monetary policy immediately, summarized below: Mark Dowding, Chief Investment Officer of BlueBay Asset Management, stated that the market generally expects Kevin Warsh to provide justification for a dovish stance, arguing that productivity gains from artificial intelligence will ensure controlled inflation. Therefore, the futures market continues to anticipate two Fed rate cuts this year, consistent with expectations over the past few months. Compared to other potential candidates, Warsh is likely to be considered a less dovish figure. Previous exchanges with other Fed members indicate that Warsh is highly respected, and his appointment as Fed Chairman is unlikely to pose a threat to the institution's independence. eToro analyst Lale Akoner pointed out that if Kevin Warsh is nominated as Fed Chairman, the impact on the Fed's balance sheet may be greater than its impact on interest rate policy. If Warsh takes office, the Fed may accelerate the balance sheet reduction process once conditions permit. This expectation is related to the steepening yield curve and the short-term strengthening of the dollar, rather than implying a direct tightening of monetary policy.