U.S. Senator Elizabeth Warren publicly questioned Federal Reserve Chairman Kevin Warsh about potential conflicts of interest during a Senate Banking Committee hearing. One of the points of contention was a alleged $100 million payment Warsh received days before his inauguration, which he failed to disclose the identity of the payer at the hearing.
The hearing questioned the source of funding.
During the hearing, Warren pressed him directly about the source of the large payment. Warren did not give a direct answer, only stating that he would comply with the disclosure requirements of the U.S. Government Office of Ethics.
Warren stated that refusing to disclose the source of funding raises questions about the independence of the Federal Reserve, a key financial institution. She also criticized the practice as "opening up space for corruption."
WLFI was brought into the focus of the questioning.
At the same hearing, Warren also extended her questions to the Trump family's crypto business, World Liberty Financial (WLFI). She stated that the project is projected to generate approximately $1.4 billion in revenue by 2025 and is currently seeking a U.S. banking license.
According to her, once the license is obtained, the company may apply for more federal-level financial services in the future, including direct access to the Federal Reserve's payment system through a main account.
Walsh has a history of supporting digital assets.
The report mentions that Warsh's attitude towards crypto assets differs from that of his predecessor, Powell. He has publicly stated that Bitcoin is an important asset worthy of attention in policymaking and believes that cryptocurrencies have become a long-term component of the global financial system.
Its financial disclosures also show that Walsh holds multiple investments related to the crypto industry, including Polychain Capital, dYdX, Dapper Labs, and assets related to Solana and Optimism.
The market is still pricing in an interest rate hike this year.
Regarding macroeconomic expectations, market assessments of the Federal Reserve's path have also shifted. At the beginning of 2026, traders initially anticipated multiple rate cuts throughout the year, but pricing has now shifted towards a tighter stance.
- The probability of an interest rate hike in October is 59%.
- The probability of another interest rate hike in December is 73.4%.
- One or two interest rate hikes may occur this year.
