HTX DeepThink: The Warsh Era Begins—Era of Comprehensive Monetary Easing May Be Over, Crypto Market Faces a Paradigm Shift in Liquidity

Chloe (@ChloeTalk1), a columnist for HTX DeepThink and researcher at HTX Research, analyzed that Kevin Warsh’s formal confirmation as Federal Reserve Chair on May 14—by an extremely narrow Senate vote—marks the completion of the most contentious leadership transition at the Fed in decades. Global risk assets, especially the crypto market, are now entering a new phase characterized by “high volatility + high uncertainty.” The biggest current market contradiction lies in the head-on clash between “political pressure for rate cuts” and “real-world inflationary pressures.” Trump continues to demand rapid rate cuts to stabilize the financial environment ahead of the midterm elections. Yet the latest U.S. PPI year-on-year reading stands at 6%, with core PPI at 5.2%—both significantly exceeding market expectations—indicating that energy price increases driven by the Iran war have begun spreading across broader goods and services. Warsh’s stance proves more complex than market expectations. Though viewed by the Trump camp as a candidate “more willing to cut rates,” his long-standing intellectual framework is fundamentally hawkish: he has repeatedly criticized the Fed for excessive market intervention and long opposed unlimited balance-sheet expansion. What he truly advocates is not traditional large-scale monetary easing, but rather a “low-interest-rate environment without QE”: shrinking the balance sheet, reducing market intervention, and simultaneously curbing inflation via AI-driven productivity gains and regulatory relaxation. This implies that the future U.S. dollar liquidity environment will likely differ sharply from the era of unlimited QE seen in 2020–2021.