President Trump announced on Friday that he was nominating Kevin M. Warsh to serve as the next chair of the Federal Reserve, positioning the former central bank governor to take a pivotal role in steering an institution that has faced a barrage of attacks from the administration over its reluctance to more aggressively lower interest rates.
In a post on Truth Social, Mr. Trump praised Mr. Warsh, saying, “He will go down as one of the GREAT Fed Chairmen, maybe the best.”
“On top of everything else, he is ‘central casting’ and will never let you down,” the president wrote.
Mr. Trump repeated that line during remarks at the White House and said that while he did not get a commitment from Mr. Warsh to cut rates, he expected that he would do so.
“He certainly wants to cut rates, I’ve been watching him for a long time,” Mr. Trump said.
Still, there are substantial questions about what direction Mr. Warsh will ultimately lead the central bank if he is confirmed by the Senate. For much of his career, Mr. Warsh was seen as a “hawk” who favored higher interest rates to keep inflation at bay. Only more recently, as he has sought the Fed job, has he begun calling for the lower interest rates that Mr. Trump prefers.
“The question is, which Warsh are we going to get?” said Michael Feroli, chief U.S. economist at J.P. Morgan.
Recent Fed Chairs
Shading indicates the party of the president during each period. Chairs who were reappointed after their first term have multiple boxes.
Friday’s announcement capped a drawn-out search process to find a replacement for Jerome H. Powell, whose term as chair of the central bank ends in May. Mr. Warsh, who served as a Fed governor from 2006 to 2011, edged out other contenders, including Kevin A. Hassett, one of the president’s top economic advisers, and Christopher J. Waller, a current governor. Rick Rieder, a top executive at BlackRock, the world’s largest asset manager, was also a finalist.
Mr. Warsh, who was a front-runner to be Fed chair during Mr. Trump’s first term, will still need to be confirmed by the Senate in a process that could prove both lengthy and contentious. Almost instantly on Friday, Democrats and Republicans feuded publicly over the president’s selection, foreshadowing a fight that will focus on whether Mr. Warsh can steer monetary policy independent from White House influence.
Senator Tim Scott, Republican of South Carolina and chair of the Senate Banking Committee, said in a statement that Mr. Warsh would deliver on Mr. Trump’s goal of “bringing accountability and credibility” to the Fed. The top Democrat on that panel, Senator Elizabeth Warren of Massachusetts, sharply disputed that notion, saying Mr. Warsh was selected only after he passed the president’s “loyalty test.”
And one Republican, Senator Thom Tillis of North Carolina, said he would oppose the nomination of Mr. Warsh or any other individual to the Fed until the Justice Department resolved its investigation into Mr. Powell. That investigation, announced this month, concerned the current Fed chair’s handling of renovations at the central bank’s headquarters in Washington, a move that Mr. Powell has decried as politically motivated.
Mr. Tillis still described Mr. Warsh as a “qualified nominee with a deep understanding of monetary policy” in a post on social media. But he added: “Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.”
The selection comes at a crucial moment for the Fed, whose officials are facing relentless pressure from the Trump administration to provide relief to borrowers while grappling with a weakening labor market and persistent inflation. That dynamic has put the Fed’s primary goals of stable prices and low unemployment in tension with each other, stoking internal divisions about what to do about rates.
Mr. Trump’s top criterion for Fed chair was someone who supported significantly lower borrowing costs, which has been the biggest source of tension between Mr. Trump and Mr. Powell, whom the president repeatedly threatened to fire before he became the subject of a criminal investigation by the Justice Department.
Mr. Powell, who up until the investigation had brushed aside the president’s attacks, hit back directly, accusing the administration of leveraging legal threats as retaliation against the institution for not lowering rates as quickly as Mr. Trump would like. Senate Republicans jumped to Mr. Powell’s support, with some even going so far as to say they would block the confirmation of any Fed nominee until the issue was resolved.
As Fed chair, Mr. Warsh, 55, would have influence over the central bank’s policy decisions, but far from total control. Interest rates are set by a 12-person committee, which includes all seven members of the Fed’s board of governors as well as a rotating set of four presidents from the regional reserve banks. The president of the Federal Reserve Bank of New York has a permanent vote.
“It’s not a committee of one, it’s a committee of 12,” said Tom Porcelli, chief economist at Wells Fargo. “He’s going to have to make a plausible argument to the rest of the committee that the economy demands further rate reductions, and I think the hurdle for that is going to be pretty high.”
On Wednesday, at their first gathering of the year, Fed officials opted to hold rates steady in a range of 3.5 percent to 3.75 percent. This week’s pause followed three quarter-point cuts in the latter half of 2025. Despite those moves, rates are well above the roughly 1 percent level that Mr. Trump has called for in the past.
That disconnect has spawned other attempts by the Trump administration to pressure the Fed, beyond targeting Mr. Powell. The president is in the process of trying to fire one governor, Lisa D. Cook, over accusations that she committed mortgage fraud before joining the Fed. The Supreme Court this month heard arguments for that case and appeared skeptical of the president’s argument that he had grounds to fire her. The justices also expressed unease about the incursion on the Fed’s independence and the prospects of an adverse economic impact.
Mr. Warsh, who previously worked as an aide to President George W. Bush, has publicly backed the need for rate cuts, arguing that tariffs will not lead to persistently higher inflation.
In an early sign of some of the resistance that Mr. Warsh might face if he pursues substantially lower rates than the economy calls for, Mr. Trump’s pick to join the central bank for a temporary stint, Stephen I. Miran, has struggled to persuade other policymakers to support the aggressive reductions that he has repeatedly voted for since being installed in September. Mr. Miran filled an opening left by Adriana D. Kugler, a governor who resigned early from her position and was later found to have violated the Fed’s trading rules.
Since leaving the Fed nearly 15 years ago, Mr. Warsh, who currently works with the billionaire investor Stanley Druckenmiller and is a senior fellow at the Hoover Institution at Stanford, has emerged as a staunch critic of the central bank. This year, he called for “regime change in the conduct of policy,” telling CNBC at the time that “the credibility deficit lies with the incumbents that are at the Fed, in my view.” He has repeatedly hit out at the Fed for missing the inflation surge in the aftermath of the pandemic and is likely to support downsizing staff.
While at the Fed, Mr. Warsh established himself as a so-called inflation hawk, who was worried about price pressures and urged higher rates. Inflation instead became stuck below the Fed’s 2 percent target. He also advocated against the central bank’s decision to buy U.S. government bonds after the global financial crisis as part of a so-called quantitative easing program aimed at shoring up the economy by lowering borrowing costs.
Mr. Warsh was instrumental in formulating the Fed’s response to the crisis more broadly, including helping to broker the sale of Bear Stearns to JPMorgan Chase and the arranging the government’s bailout of American International Group, the insurance giant. Overall, he has supported the Fed’s maintaining a small balance sheet.
Mr. Warsh has since linked lower interest rates to a smaller balance sheet for the Fed, arguing that shrinking the central bank’s footprint in financial markets — a move that most would likely raise long-term borrowing costs — would give officials more space to reduce short-term ones.
As part of that plan, Mr. Warsh has called for a revamp of a 1951 agreement that established the Fed’s monetary policy independence while giving Treasury control of government spending and taxation. He wants closer coordination between the Fed in terms of how it manages its balance sheet and the debt the Treasury Department issues in order to cover the government’s obligations.
Still, Mr. Warsh’s shifting views on monetary policy — and the timing of those shifts — are likely to fuel suspicion that his positions are driven by politics rather than economics. Mr. Warsh called for higher interest rates during both the Obama and Biden administrations, but has supported lower rates when Mr. Trump has been in office.
“His views on rate cuts and rate hikes have mostly to do with who is in office and election timing,” said Skanda Amarnath, a former member of the Fed staff who now leads Employ America, an employment-focused research and advocacy group.
That history could make it harder for Mr. Warsh to win support for rate cuts from other Fed policymakers, and to maintain credibility with both investors and lawmakers in Congress. But if Mr. Warsh tries to establish his independence by moving slowly to cut rates, he risks being at odds with Mr. Trump just as Mr. Powell was.
Soon after announcing Mr. Warsh as his choice, the president returned to social media to acknowledge what had been known for some time: that he had considered a roster of additional Fed candidates, including Mr. Hassett, whom Mr. Trump said he had opted to keep at the White House because “he is doing such an outstanding job.”
If confirmed by the Senate, Mr. Warsh will have to overcome doubts about how he will carry out his responsibilities at the helm of the Fed and the extent to which he will bow to pressure from Mr. Trump.
Glenn Hubbard, a Columbia economist who served as a top adviser to President George W. Bush, praised Mr. Trump’s selection, but said Mr. Warsh would need to work to demonstrate his independence from the president.
“Warsh has the right experience, financial market knowledge and political skill to be very effective,” Mr. Hubbard wrote in an email. “His challenges are preserving Fed independence and leading structural change in an institution he has (often rightly) criticized.”
At risk is the public’s confidence that the Fed is operating free of political meddling, an independence that economists and investors have long seen as crucial to the smooth functioning of financial markets and the overall strength of the economy.
In the past, Mr. Warsh has described the Fed’s independence as “precious” and “essential,” but he has also suggested that it should not operate entirely autonomously.
“History tells us that the independent operations in the conduct of monetary policy is essential,” he told CNBC this summer. “But that doesn’t mean the Fed is independent in everything else it does.”
Defusing fears of an unqualified pick, President Donald Trump nominated former Federal Reserve governor Kevin Warsh on Friday to succeed Jerome H. Powell as chairman. Warsh served on the Fed board from 2006 to 2011, a pivotal time in U.S. economic history. The Stanford alumnus has a deep knowledge of financial markets and decades of experience with monetary policy issues.
Now Trump needs to decide what he wants more: Warsh as chairman or his phony criminal investigation of Powell. Sen. Thom Tillis (R-North Carolina) says he believes Warsh to be qualified for the job but that he will block his nomination until the inquiry into Powell is “fully and transparently resolved.”
As a member of the Senate Banking Committee, which considers Fed nominations, Tillis has this power. The committee has 13 Republicans and 11 Democrats. If all other Republicans vote to put the nomination before the whole Senate and Tillis joins all the Democrats to oppose it, the 12-12 tie would mean the nomination does not advance.
This should be an easy decision for Trump: Formally drop the Powell probe, and get your Fed chairman. If no new chair is confirmed when Powell’s term expires in May, Powell would remain in the role
For Warsh, this is the culmination of years of angling. He has been a critic of the Fed for years, pitching various ideas for reforming the most important central bank in the world. He’s correct to say that the Fed has strayed too far from its congressional mandate, which is stable prices and full employment, not climate change or diversity. The Fed is not supposed to be involved in those areas, and it is poorly equipped to be effective in either. What it can control is interest rates.
Warsh also had a reputation as an inflation hawk, until the monetary dove-in-chief became his best opportunity to get the chairmanship. His intellectual flexibility has been on display in his public commentary.
There isn’t much of a case for rate cuts right now, with the economy growing and unemployment low. Economic growth and low unemployment would ordinarily be the kind of thing a president would celebrate unreservedly, but for Trump it’s a mixed blessing because it means lower interest rates aren’t justified, and the former developer always wants lower rates.
Warsh might give them to him, but he’d still have to convince a majority of the Federal Open Market Committee to go along. Once he’s confirmed for the job, with a term that will outlast Trump’s time in office, he will need to make decisions for the good of the country.
Incidentally, those decisions are also in Trump’s short-term political interest. If unneeded rate cuts spark higher inflation, as economic theory would predict, Republicans will feel the electoral consequences in the midterms and Trump’s approval will take a hit. Inflation remains a top concern for voters and for good reason: It has been above the Fed’s target of 2 percent per year every month since March 2021.
After months of speculation and an unusually public selection process, Donald Trump announced Friday morning his intention to nominate Kevin Warsh as the next chair of the Federal Reserve, replacing Jerome Powell. The decision concludes a protracted and dramatic contest that exposed deep divisions within Trump's economic circle and revealed the outsized influence of Wall Street in shaping monetary policy leadership.
The saga began shortly after Trump's November 2024 election victory, when Warsh—former Federal Reserve governor and son-in-law of Estée Lauder heir Ronald Lauder—visited Mar-a-Lago for an initial conversation. According to associates, Trump greeted him with surprise: "You're my Fed chair," he reportedly said, suggesting Warsh's appointment was already assumed. Warsh himself had long believed the role would ultimately be his.
But the path proved far more complicated. For over a year, Warsh faced fierce competition from Kevin Hassett, Trump's trusted National Economic Council director. By late 2025, Hassett appeared to have secured the position. Trump told a cabinet meeting he had narrowed his list to a single candidate, canceled other interviews, and spent the holiday season hosting Hassett at Mar-a-Lago while Warsh vacationed in the Bahamas. "I know who I am going to pick," Trump told reporters, grinning when asked if Hassett was the choice.
Inside the White House, Warsh's prospects seemed dim. One senior official dismissed him to *The Wall Street Journal* as akin to "a Venezuelan drug smuggler clinging to a boat" after U.S. forces had fired upon it—suggesting Trump viewed Warsh as overly eager for the role. Another compared him to a used-car salesman.
Yet Warsh possessed a critical advantage: decades of relationships with Wall Street titans and GOP establishment figures. In December, JPMorgan Chase CEO Jamie Dimon publicly endorsed Warsh at a private New York conference. Stanley Druckenmiller—legendary investor, Warsh's business partner, and mentor to Treasury Secretary Scott Bessent—mobilized allies to lobby administration officials, arguing that Hassett's proximity to Trump would undermine his credibility as an independent central banker.
The turning point arrived on January 11, when Powell disclosed a Justice Department criminal investigation into his congressional testimony—a revelation that ignited bipartisan backlash. Senators Thom Tillis and Lisa Murkowski vowed to block any Fed nominee until the probe concluded. Hassett, who had spent months publicly attacking Powell and defending administration pressure on the Fed, suddenly found his closeness to Trump transformed from asset to liability. On January 16, Trump delivered the decisive blow at a White House event with Hassett seated nearby: "I actually want to keep you where you are if you want to know the truth."
Warsh's strategy contrasted sharply. After giving speeches outlining his Fed vision in spring 2025, he made selective media appearances before retreating from public view. His December 10 meeting with Trump—held hours after the Fed approved a quarter-point rate cut—proved pivotal. According to those briefed on the conversation, Trump pressed Warsh on whether he would support interest-rate reductions. Warsh signaled his alignment. "I asked him what he thinks. He thinks you have to lower interest rates," Trump later told the *Journal*.
Trump also appeared swayed by Warsh's presentation. Associates reported the president remarked on Warsh's "acumen and good looks"—a notable shift from 2017, when Trump passed over Warsh for the silver-haired Powell, reportedly deeming Warsh too youthful in appearance.
Other contenders never gained traction. Fed Governor Christopher Waller's interview lasted just 30 minutes and began two and a half hours late, with Trump arriving still dressed down after attending a dignified transfer ceremony for soldiers killed in Syria. BlackRock executive Rick Rieder pitched a "3-4-5" rate-targeting plan but faced skepticism over past donations to Democrats and Republican rivals like Nikki Haley.
Treasury Secretary Scott Bessent, mindful of predecessor Steven Mnuchin's fate after recommending Powell in 2017—a choice Trump later bitterly regretted—deliberately avoided endorsing any candidate. Instead, he curated an extended audition process that screened contenders, amplified pro-rate-cut messaging, and insulated him from blame.
The final catalyst came Wednesday, when the Fed held rates steady—halting a streak of cuts and prompting Powell to suggest further reductions might not be imminent. Warsh met with Trump Thursday; the conversation went so well the president accelerated his timeline, announcing the selection Friday morning.
"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 posted at 6:48 a.m. "On top of everything else, he is 'central casting,' and he will never let you down."