Trump Picked Warsh for Rate Cuts, US Markets Got the Opposite

Kevin Warsh wrapped up his first Federal Reserve press conference on June 17 and made one thing unmistakably clear: price stability comes first. The S&P 500 fell 1.2% on the day, the worst “Fed day” performance for any new chair since 1994.

President Donald Trump nominated Warsh after months of publicly demanding rate cuts from the central bank. The man he appointed just sent the opposite signal, and the Dow Jones Industrial Average fell more than 500 points in response, erasing gains from earlier in the session.

Kevin Warsh’s Message to Markets

The Fed held rates steady on Wednesday, a move markets had fully priced in ahead of the meeting. The shock came from Warsh’s tone. He pared down the closely watched Federal Open Market Committee (FOMC) statement, a document traders and economists parse word by word, and announced task forces aimed at overhauling the central bank’s operations from the ground up.

Bespoke Investment Group, whose data on new-chair first-day performance goes back to 1994, noted that prior chairs Ben Bernanke, Janet Yellen, and Jerome Powell all saw the S&P 500 close lower on their first Fed days, but none by this magnitude.

Today will be the worst "first Fed Day" for any new chair since 1994 if the S&P's current 1% decline holds into the close. (Prior to 1994 they didn't announce policy decisions on the day of the FOMC meeting.) https://t.co/5lbMzCR6Jv

— Bespoke (@bespokeinvest) June 17, 2026

DoubleLine Capital CEO Jeffrey Gundlach, speaking on CNBC’s Closing Bell, put it plainly: “He is absolutely telling you that he plans on delivering on price stability. That means we’re not going to have such easy money policy as everybody thought maybe Chairman Warsh would do back in the first quarter of this year, when everyone was counting on rate cuts.”

A Fed Rate Hike by October?

Fed funds futures, contracts traders use to bet on the direction of interest rates, now show traders pricing in the possibility of a rate hike as early as October, a scenario few had entertained at the start of 2026. Several FOMC members had already signaled openness to raising rates this year, and Warsh’s press conference confirmed that the new Fed is not steering toward accommodation.

“Investors will ultimately need to stay tuned to see what the task forces deliver, but one thing is clear now,” said Josh Jamner, Director and Senior Investment Strategy Analyst at ClearBridge Investments. “A new chapter at the Fed has begun.”

What This Means for Bitcoin

Tighter monetary policy is a direct headwind for risk assets, and Bitcoin has historically tracked liquidity conditions closely. If the Fed is signaling higher rates rather than lower ones, it removes a tailwind that had supported crypto markets through early 2026.

Bitcoin and gold both fell after Warsh’s press conference. For crypto investors who positioned around expected rate cuts, the calculus has shifted. The question is no longer when the Fed cuts, but whether it raises instead.