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Kevin Warsh got the Fed Chair position because Trump wanted a rate cutter in charge. Months later, the market is betting on the exact opposite move. That gap between promise and probability is now the biggest story in US monetary policy.
So is this the time for Fed rate cut or Trump has to wait for the next meeting? and how this will imapct the <a href="https://www.coingabbar.com/en/crypto-currency-news/why-is-crypto-market-down-today-ppi-data-cpi-data-crypto-news" rel="noopener noreferrer nofollow">crypto market</a>?&nbsp;&nbsp;
Key Takeaways
<ul>
 <li>Kevin Warsh has made zero rate moves since taking over as Fed Chair in May 2026, and the last Fed rate cut of 25bps was recorded back on December 10, 2025.</li>
 <li>CME FedWatch Tool data puts the odds of a 25bps hike at 67.4% for the September 16 meeting, against just 32.6% for no change at all.</li>
 <li>August PPI came in at 5.4% year-on-year, sharply above July's 4.7%, adding fresh pressure on Warsh right before he has to decide on a Fed rate cut.</li>
</ul>
<h3 id="span-span-style-font-size-16px-trump-s-handpicked-fed-chair-faces-his-first-big-test-span-span">Trump's Handpicked Fed Chair Faces His First Big Test</h3>
Trump was Warsh's loudest backer. He pushed hard for Warsh to replace Jerome Powell, and he made one thing clear before the appointment: the next Fed Chair had to be willing to cut. Warsh took the Chair seat at the Board of Governors of the <a href="https://www.coingabbar.com/en/crypto-currency-news/september-fed-meeting-week-cpi-ppi-fed-rate-hike" rel="noopener noreferrer nofollow">Federal Reserve System</a> in May 2026.
Since then, nothing has moved. The federal funds rate has sat at 3.50%-3.75% for months, unchanged from the level set at that December 2025 meeting. No Fed rate cut. No hike either. Just silence, while Trump waits.
<a href="https://x.com/KobeissiLetter/status/2098232816357999083" rel="noopener noreferrer nofollow">The Kobeissi Letter</a> summed up the tension in one line: Trump made rate cuts a pre-condition for his next Fed Chair, so the real question now is whether Warsh will actually raise rates in his first move since getting the job. According to the same post, markets may be overestimating the chance of a September hike.
<img alt="Trump on Fed Rate cut" src="https://d3iuzwoiyg9qa8.cloudfront.net/webadmin/storage/public/commonEditerImage/VOg5tJL3aFTsLvkDu80taHAciwYbNkbLIUQ3WaJc.png" width="300" title="Trump on Fed Rate cut">
<h4>Trump's September 4 Trade Threat Rattles the Market</h4>
On September 4, <a href="https://x.com/KobeissiLetter/status/2095884366626918685" rel="noopener noreferrer nofollow">Trump dropped a statement</a> that shook the entire market. As reported by the Kobeissi Letter, he threatened to stop trading with every country that runs a trade surplus against the US, unless the Fed delivers a rate cut.
That threat is not small. It would effectively cut off trade with close to half of all US trading partners, including:
<ul>
 <li>Mexico</li>
 <li>China</li>
 <li>Taiwan</li>
 <li>Germany</li>
 <li>Japan</li>
 <li>South Korea</li>
 <li>Canada</li>
 <li>India</li>
</ul>
Trump also claimed the Supreme Court has ruled he holds an "absolute right" to take this step. Meanwhile, the market has flipped its expectation entirely. Instead of pricing in the cut <a href="https://www.coingabbar.com/en/crypto-currency-news/trump-5000-dividend-news-gop-win" rel="noopener noreferrer nofollow">Trump demanded</a> before Warsh even took office, traders now think Warsh's first move could be a hike.
<h4>What the Fed Rate Cut Odds Actually Look Like</h4>
Numbers from the CME FedWatch Tool tell the story plainly. Right now, traders see a hike as more likely than a hold, and a cut barely features in the conversation at all.
<img alt="Fed rate Cut Possibility" src="https://d3iuzwoiyg9qa8.cloudfront.net/webadmin/storage/public/commonEditerImage/XhLnVPuCfboNQRRTSi0s73slyXnFugpFz0EFWnx3.png" width="300" title="Fed rate Cut Possibility">
<div>
 <table>
 <colgroup>
 <col width="172">
 <col width="167">
 </colgroup>
 <tbody>
 <tr>
 <td>Rate Decision Scenario</td>
 <td>Current Market Odds</td>
 </tr>
 <tr>
 <td>25bps Rate Hike</td>
 <td>67.4%</td>
 </tr>
 <tr>
 <td>No Rate Change</td>
 <td>32.6%</td>
 </tr>
 </tbody>
 </table>
</div>
That's a big shift from the political pressure Trump has publicly applied. It also means the September 16 meeting carries real weight, not just for interest rates, but for how independent the Fed actually behaves under a Trump-picked Chair.
<h4>Hot PPI Data Adds Pressure Before the Decision</h4>
Inflation data just made Warsh's job harder. According to the U.S. <a href="https://www.bls.gov/news.release/ppi.nr0.htm" rel="noopener noreferrer nofollow">Bureau of Labor Statistics</a>, the Producer Price Index for final demand rose 0.4% in August on a seasonally adjusted basis, after a 0.1% rise in July and a 0.1% drop in June. On a 12-month unadjusted basis, prices are up 5.4%.
Break it down further and the picture gets sharper. Final demand goods jumped 1.1% in August, while services rose a smaller 0.1%. Core prices, stripping out food, energy and trade services, rose 0.3% in August after climbing 0.4% in July, and are up 4.7% over the past 12 months.
<a href="https://x.com/PeterSchiff/status/2098040195773837489" rel="noopener noreferrer nofollow">Peter Schiff flagged</a> this on X, noting the 5.4% annual PPI figure came in slightly above forecasts and well above the prior month's 4.7%. His take: inflation is moving the wrong way, and the Fed is behind the curve. A Fed rate cut in that kind of environment becomes a much tougher sell.
<img alt="Peter Schiff on PPI data" src="https://d3iuzwoiyg9qa8.cloudfront.net/webadmin/storage/public/commonEditerImage/3KhgTlyAEEKQMVsn7Ms0AgGM7FPdIQmKKxFCnIHF.png" width="300" title="Peter Schiff on PPI data">
<h4>Crypto Market Feels the Heat Too</h4>
The market reaction wasn't limited to bonds and rate futures. <a href="https://www.coingecko.com/" rel="noopener noreferrer nofollow">Per CoinGecko</a>, the global cryptocurrency market cap sits at $2.73 trillion, down 0.7% over the last 24 hours, with $100 billion in trading volume over the same period. Bitcoin dominance is at 56.8%, and Ethereum dominance is at 11%.
Hot inflation data landing right before a high-stakes <a href="https://www.coingabbar.com/en/crypto-currency-news/polymarket-news-today-warsh-waller-trump-on-fed-rate" rel="noopener noreferrer nofollow">Fed decision</a> is exactly the kind of setup that rattles risk assets, and crypto took its share of the hit today.
<h4>What Comes Next for the Fed Rate Cut Question?</h4>
Nobody gets a real answer until September 16. Before that, the next data point lands today: <a href="https://www.coingabbar.com/en/crypto-currency-news/polymarket-news-today-us-cpi-data-august-2026-odds" rel="noopener noreferrer nofollow">US CPI figures</a> release at 8:30 AM ET on September 11, and that report will shape expectations heading into the meeting.
Until then, the standoff continues. Trump wants a cut. The market is pricing a hike. And Warsh has stayed quiet on every rate decision since taking the Chair.
<h2 id="span-span-style-font-size-16px-conclusion-span-span">Conclusion</h2>
Warsh has made no rate moves since May 2026, and traders now favor a hike over a cut for September 16. With <a href="https://www.coingabbar.com/en/crypto-currency-news/us-ppi-inflation-crypto-reaction-bitcoin-price-today" rel="noopener noreferrer nofollow">hot PPI data</a>, a Trump trade threat, and today's CPI release still ahead, the Fed rate cut question stays wide open until decision day.
YMYL Disclaimer:This content covers financial and economic matters, including interest rate policy, inflation data and market pricing, which fall under Your Money or Your Life (YMYL) guidelines. It is for informational purposes only and should not be treated as financial, investment, trading or legal advice. Rate probabilities, market caps and dominance figures change quickly and can shift materially before or after the September 16 Fed meeting. Always verify current figures from primary sources such as the Federal Reserve, the U.S. Bureau of Labor Statistics, and the CME FedWatch Tool, and consult a licensed financial advisor before making any investment or trading decisions.

Will Warsh Approve a Fed Rate Cut to Please Trump This September?

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