US President Donald Trump nominates former Federal Reserve Governor Kevin Warsh to lead the central bank when Chair Jerome Powell’s term ends in May, concluding months of public speculation over the next Fed chief.
The decision follows a sustained pressure campaign by Trump against Powell, whom he appointed during his first term but frequently criticises for resisting faster interest rate cuts. Trump announces the nomination on Friday, praising Warsh’s credentials and loyalty in a post on his Truth Social platform.
“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best,” Trump writes, adding that Warsh will “never let you down.”
Warsh, 55, emerges as a compromise candidate within Trump’s orbit. While he recently supports lower interest rates, he stops short of endorsing the aggressive monetary easing proposed by other potential nominees.
Despite market optimism, Warsh faces a contentious Senate confirmation process. Lawmakers signal heightened scrutiny amid Trump’s repeated public attacks on Powell and the Justice Department’s recent decision to open a criminal investigation into the sitting Fed chair.
Critics argue the move threatens the Federal Reserve’s independence. Powell and other opponents warn Trump’s actions aim to politicise monetary policy and bend the institution to presidential influence.
The Federal Reserve plays a central role in stabilising the US and global economy. It manages inflation, promotes maximum employment, regulates banks, and influences borrowing costs across mortgages, auto loans, and consumer credit through its interest rate decisions.
Senator Elizabeth Warren, the leading Democrat on the Senate Banking Committee, calls the nomination “the latest step in Trump’s attempt to seize control of the Fed.” She cites the Powell investigation and Trump’s push to remove Fed Governor Lisa Cook, now under Supreme Court review.
Republican Senator Thom Tillis states he will withhold support for any nominee until the Justice Department probe into Powell concludes, insisting that protecting the Fed from political interference is “non-negotiable.”
Other Republicans welcome the move. Senator Bill Hagerty says Warsh is uniquely qualified to refocus the central bank on its statutory mandate.
If confirmed, uncertainty remains over whether Powell steps down immediately or completes his term. While past chairs typically exit upon replacement, current political tensions fuel speculation that Powell may remain.
Warsh currently serves as a fellow at the Hoover Institution and lectures at Stanford’s Graduate School of Business. He joins the Federal Reserve Board in 2006 at age 35, becoming the youngest governor in its history. His background includes roles in the George W Bush administration and investment banking at Morgan Stanley.
His father-in-law, Ronald Lauder, is a major Republican donor and longtime Trump confidant. Though once a proponent of higher interest rates to curb inflation, Warsh increasingly argues for looser policy and sharply criticises current Fed leadership, calling for “regime change” and opposing the institution’s engagement on climate-related issues.
Erizia Rubyjeana
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