Trump Names Kevin Warsh as His Pick to Lead the Federal Reserve

President Trump said Friday that he will nominate Kevin Warsh, a former Federal Reserve governor, as the next chair of the central bank, according to CNBC, CBS News and PBS NewsHour. Warsh needs Senate confirmation and would succeed Jerome Powell when Powell’s term as chair expires in May, the outlets reported. CNBC quoted Trump’s Truth Social post saying he has “known Kevin for a long period of time” and has “no doubt that he will go down as one of the GREAT Fed Chairmen.”

Warsh served on the Fed’s Board of Governors from 2006 to 2011, PBS and CBS reported. PBS reported that he is now a fellow at the Hoover Institution and a lecturer at Stanford’s business school and was an economic adviser to President George W. Bush. CBS reported that he has also worked with investor Stanley Druckenmiller. Aaron Klein of the Brookings Institution told PBS that Warsh was the Fed board’s interlocutor with the markets during the 2008 financial crisis.

His views on rates have shifted. PBS reported that Warsh was historically a hawk, reluctant to cut rates for fear of inflation, but argued in a November Wall Street Journal opinion piece that the Fed should cut. Trump said Warsh “certainly wants to cut rates,” though he said he had not discussed cuts with him, CNBC reported. Warsh has also criticized the Fed’s record on inflation, saying in a July CNBC interview that “the credibility deficit lies with the incumbents,” and has called for “regime change” at the Fed, CNBC and CBS reported; CBS added that he has called Fed independence on monetary policy “essential.” PBS reported that he has consistently opposed large-scale asset purchases by the Fed, whose holdings exceed $6.5 trillion.

The choice followed a selection process that CNBC said began last summer and led by Treasury Secretary Scott Bessent, with 11 candidates at one point. Finalists included Fed Governor Christopher Waller, BlackRock executive Rick Rieder and National Economic Council Director Kevin Hassett, CNBC reported.

The confirmation faces a hurdle. Sen. Thom Tillis, a North Carolina Republican, said he will oppose confirmation of any Fed nominee “until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved,” and called Warsh “a qualified nominee with a deep understanding of monetary policy,” CNBC reported. CBS reported that the Justice Department subpoenaed the Fed over the renovation of its headquarters, that Powell called the move an attempt to intimidate the Fed over its rate decisions, and that the White House said Trump did not direct the subpoenas. Hassett said the matter “could get resolved quickly,” according to CNBC.

Economists reacted with cautious approval. Mark Gertler of New York University described experts’ response as “cautious relief,” PBS reported; Gertler said Warsh is unlikely to try to “tear the place apart.” CNBC quoted David Bahnsen of the Bahnsen Group saying Warsh “has the respect and credibility of the financial markets,” but also that no one chosen for the job “wasn’t going to be cutting rates in the short term.” CBS cited economist Kenneth Rogoff’s view that Warsh is “highly regarded” but “even more hawkish than Powell.”

Powell’s chair term ends in May, but his term as a governor runs longer, CBS and CNBC reported, so he could remain on the board. The Fed held rates steady at its meeting earlier this week, CBS reported.