2 hours ago
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President Trump has publicly urged Fed nominee Kevin Warsh to cut interest rates immediately. The likelihood of a 25 basis point rate cut after the April 2026 meeting sits at 0.2% YES, up slightly from 0% yesterday.
Rate cut odds ticked up marginally, but traders remain deeply skeptical. The 25 bps cut market shows just 0.2% YES, pricing in near-zero confidence that Warsh would deliver cuts given high inflation and the ongoing US-Iran conflict. The 50+ bps cut market is flat at 0.1% YES, unchanged from previous sessions. Traders are not betting on a policy shift.
Market volumes confirm the indifference. A combined $2.3M in face value has traded, but actual USDC volume is just $5,055. It would take $5,326 to move the 25 bps market 5 points, which tells you how thin this book is. The largest price move was negligible. Warsh’s words haven’t changed trader behavior.
Trump’s pressure is public, but Warsh’s Senate testimony and stated commitment to controlling inflation suggest he won’t bend easily. At 0.2¢, a YES share pays $1 if a cut happens, a 500x return. But believing in imminent cuts requires believing Warsh will reverse his own stated priorities almost immediately after confirmation.
Watch for Warsh’s next Senate hearing and any signals from Fed voting members. If Warsh shifts his tone or Congress applies additional pressure, these markets could move off the floor.
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