Traders Shift Expectations as Interest Rate Cut Anticipated for March FOMC Meeting
By John Nada·Feb 7, 2026·2 min read
Traders are increasingly expecting an interest rate cut at the March FOMC meeting, reflecting concerns over the hawkish stance of Fed nominee Kevin Warsh.
A significant shift in trader sentiment is underway, with 23% now expecting an interest rate cut at the upcoming March Federal Open Market Committee meeting. This change follows heightened concerns over a hawkish stance from Kevin Warsh, the nominee for Federal Reserve chair by US President Donald Trump.
According to data from the Chicago Mercantile Exchange (CME) Group, the number of traders anticipating a rate cut surged nearly 5% from the previous day, when only 18.4% were signaling such expectations. Those predicting a rate cut are looking for a 25 basis point reduction, with no investors forecasting a cut of 50 basis points or more.
Warsh's nomination has rattled markets, as many view him as favoring higher interest rates for extended periods. Analyst Nic Puckrin noted that this perception has contributed to recent declines in precious metals. He pointed out that if Warsh implements policies aimed at reducing the central bank's balance sheet, it could lead to a tighter liquidity environment, which markets will need to adjust to.
Thomas Perfumo from Kraken commented that Warsh's nomination sends mixed signals regarding liquidity and credit in the US. Instead of the expected expansion, it may suggest stabilization, a reality that crypto investors need to consider carefully. Given the influence of interest rate policy on crypto assets, the implications could be significant, as easing liquidity conditions are often viewed as favorable for asset prices, while tighter conditions can have the opposite effect.
Investors are now digesting the potential impacts of Warsh's views on future Fed policy. As the market reacts to these developments, it becomes clear that the economic landscape is shifting, and traders must remain vigilant. This evolving situation underscores the critical link between monetary policy and the performance of crypto assets, highlighting the importance of staying informed about such developments.