Trump announces Kevin Warsh as Fed chair nominee

(The Hill) — President Donald Trump early Friday nominated former Federal Reserve board member Kevin Warsh to be the central bank's next chair.

"I am pleased to announce that I am nominating Kevin Warsh to be the CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM," Trump wrote on Truth Social.

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," he continued later in the post. "On top of everything else, he is "central casting," and he will never let you down. Congratulations Kevin!

Warsh, a former Morgan Stanley banker and economic adviser to George W. Bush, had long been considered one of the frontrunners for Trump's nomination. He served on the Fed board from 2006 through 2011, where he became the youngest governor in the bank's history and served as its liaison to Wall Street during the 2007-08 financial crisis.

A perennial candidate for top Trump administration economic posts, Warsh was among the finalists for the president's first Fed chair nomination in 2017. He ultimately lost out to Fed Chair Jerome Powell, whom he would replace if confirmed by the Senate.

Powell's term as Fed chair ends in May.

Warsh, however, may have trouble getting confirmed amid Trump's efforts to reshape the Fed.

Republican Sens. Thom Tillis (N.C.) and Lisa Murkowski (Alaska) have vowed to oppose anyone Trump nominates to the Fed while the Justice Department is conducting a criminal probe into the bank and Powell.

Tillis could also use his perch on the Senate Banking Committee to hinder Trump's Fed nominees from being approved by the panel, which is a key procedural step on the way to a full Senate confirmation vote.

Tillis and Murkowski's support could be critical for Warsh with Senate Democrats unlikely to give him much, if any, support. Democrats are also fuming over Trump's attempt to fire Fed board member Lisa Cook, whose challenge to the president's order was heard last week by the Supreme Court.

A ruling against Cook could give Trump power to fire members of the Fed board and replace them with nominees sympathetic to his views, giving him unprecedented control over the central bank.

Trump has made clear that his next Fed chair nominee should be someone willing to consult him on interest rate decisions. Fed historians and analysts say such a relationship would breach the bank's historic independence to set monetary policy based on the economic views of top officials, not the political whims of the president.

In Warsh, the president has tapped a loyal advocate with a Fed background who may willing to break the mold of his predecessors.

Warsh has accused the Fed under Powell of using independence as a shield from accountability, and said members of the bank should "grow up" and "be tough" in the face of criticism.

Warsh also shares close political connections to Trump. His father-in-law, cosmetics heir Ronald Lauder, has donated millions of dollars to Trump and Republican candidates, and was reportedly behind Trump's quest to purchase Greenland.

Trump has frequently called his decision to nominate Powell as Fed chair one of his biggest regrets of his first term. The president has accused Powell, a Republican, of manipulating interest rates for political ends, mismanaging inflation and lacking both the intellect and fortitude to effectively manage the central bank.

Trump's rage with Powell began soon after he took over the Fed chairmanship in 2018, and refused to heed the president's call for crisis-level interest rate cuts. As the U.S.-China trade war heated up in 2019, Trump berated Powell for not slashing rates to give the White House more leverage in trade negotiations.

When Powell stood firm, Trump then began threatening to fire the Fed chair despite federal law protecting Fed board members from being dismissed by the president but "for cause."

Trump eased up on Powell when the coronavirus pandemic crashed the economy in 2020, prompting the Fed to slash rates to the president's desired level and deploy trillions of dollars in emergency loans. But the president turned up the heat on Powell as he stormed back to the White House in 2024, and has spent most of the past year threatening to fire him again.

Powell has insisted that he will not leave before the end of his Fed chairmanship, and said the bank's decisions under his watch have been guided exclusively by the Fed's dual mandate of maximum employment and low, stable inflation.

Close

Thanks for signing up!

Watch for us in your inbox.

Subscribe Now

Daily News

f5a1712a8dDaily Newsadd_subscribersailthru_acqwid_inlineSIGN UP NOW