Hedge fund manager David Einhorn is betting that under Kevin Warsh's leadership, the Federal Reserve will cut interest rates much more significantly than the market currently anticipates.

The co-founder of Greenlight Capital stated that he has purchased Secured Overnight Financing Rate (SOFR) futures, wagering that these contracts will rise if the Fed reduces borrowing costs more aggressively.

"I think one of the best trades right now is to bet that rate cuts this year will exceed expectations," Einhorn said in a CNBC interview on Wednesday. "I believe that by the end of the year, we will see far more than just two rate cuts."

His comments followed a better-than-expected jobs report, which led traders to scale back their bets on Fed rate cuts this year to approximately two reductions of 0.25 percentage points each.

Einhorn suggested that Kevin Warsh, whom President Donald Trump has selected to replace current Fed Chair Jerome Powell, would likely fulfill the president's desire for lower rates. Trump has been urging Powell to cut rates, which would help reduce the interest cost on U.S. government debt. Powell's term as chair ends in May.

The Fed Chair is only one of 12 policymakers who vote on interest rates. However, Einhorn indicated that Warsh, a former Fed governor, could persuade his colleagues to accept his view that rising productivity would create room for more accommodative monetary policy, even if the economy remains strong.

"He wasn't chosen to keep rates steady," Einhorn said. "He will argue that we can cut rates even while the economy is running at a high level."