On Friday, U.S. President Donald Trump nominated Kevin Warsh, an academic economist, investor, and former governor of the U.S. Federal Reserve, to be the next chairman of the world’s most important central bank. The term of current chairman Jerome Powell, who has been under fire from Trump for years for his refusal to slash interest rates, will expire in May.
“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. On top of everything else, he is ‘central casting,’ and he will never let you down,” Trump posted on social media. (Warsh is the son-in-law of cosmetics billionaire Ronald Lauder, who helped plant the idea of annexing Greenland in Trump’s mind.)
On Friday, U.S. President Donald Trump nominated Kevin Warsh, an academic economist, investor, and former governor of the U.S. Federal Reserve, to be the next chairman of the world’s most important central bank. The term of current chairman Jerome Powell, who has been under fire from Trump for years for his refusal to slash interest rates, will expire in May.
“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. On top of everything else, he is ‘central casting,’ and he will never let you down,” Trump posted on social media. (Warsh is the son-in-law of cosmetics billionaire Ronald Lauder, who helped plant the idea of annexing Greenland in Trump’s mind.)
Warsh’s nomimation was seen by markets as the lesser of several evils; another front-runner in the long race to succeed Powell was White House economic advisor Kevin Hassett, who investors saw as unduly willing to submit to presidential pressure regarding economic management. Warsh served as a governor of the Fed from 2006 to 2011, and he was considered for the top job in 2017. He is perceived as a Fed chair who may placate Trump in the short term by easing interest rates, but who will maintain more of the central bank’s independence.
U.S. stock markets dipped slightly in premarket trading on Friday; bond yields held steady, and the dollar stopped bleeding after Trump’s announcement.
The nomination comes at a critical time for the Fed. Trump has spent years berating Powell, who was Trump’s own pick for chairman, for not slashing interest rates quickly enough to turbocharge the economy and give Trump an economic boost. Powell and the Fed, who did trim lending costs three times in 2025, have wrestled with a difficult mix of stubborn inflation (which requires stable or higher rates) and sluggish employment (which might need the nudge of lower rates).
The U.S. Justice Department served Powell with a subpoena earlier in January, prompting fears of intensified interference in the Fed’s statutory independence. Trump has also sought to fire another Fed governor, Lisa Cook, who has resisted his calls for rate cuts. Her case is currently pending at the Supreme Court.
Warsh’s nomination does raise several questions.
First is whether he will be able to advance through the Senate confirmation process; Republican Sen. Thom Tillis has promised to block any nominees for Fed chair until the Justice Department’s investigation of Powell is resolved.
Second is whether Warsh will stick to his own ideas on monetary policy or do Trump’s bidding—and if Warsh does hew to his own views, which ones will they be? Warsh was famously derided during the 2008-2009 financial crisis for taking a hawkish line on monetary policy, arguing against low interest rates and central-bank stimulus during a time of high unemployment and a terrible recession. He also has been outspoken about the need to overhaul the entire way that the Fed operates, calling for “regime change.”
“The Fed should stop indulging in a policy of trying to fine-tune the economy,” he wrote in 2017.
Lately, he has indicated more comfort with cutting lending costs—even at a time of sticky inflation and a growing economy, which is counter to what most economists (and most of the Fed) think is correct.
Finally, if he does get confirmed, who else will be on the board? Traditionally, outgoing chairmen leave the institution entirely. But Powell has a seat as governor until 2028 if he wants to keep it—which he might, given Trump’s recent attacks on the bank’s independence. There is also the question of Cook’s fate; if she is removed, then Trump could nominate one more dovish governor to further tilt the 12-member board closer to his preferences.
This post is part of FP’s ongoing coverage of the Trump administration. Follow along here.
