President Donald Trump has tapped Kevin Warsh for the Federal Reserve’s next chair after months of escalating pressure on the Fed to cut interest rates.
“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 announced on 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… he will never let you down.”
won’t be unfamiliar territory for Warsh, 55, who formerly served on the Fed’s Board of Governors from 2006 to 2011. Trump has sought a candidate friendly to markets who also aligns with him on dramatically cutting interest rates. Warsh reportedly met with Trump at the White House on Thursday, a source told Reuters.
“A lot of people think this is somebody that could’ve been there a few years ago,” Trump told reporters on Thursday, teasing his nomination.
Trump’s Friday morning announcement brought to a close a monthslong selection process helmed by Treasury Secretary Scott Bessent. Aside from Warsh, the top contenders for the position were National Economic Council director Kevin Hassett, Fed governor Christopher Waller, and BlackRock Inc. executive Rick Rieder.
Warsh will still require Senate confirmation, which could be complicated by bipartisan concern over the Justice Department’s investigation into current Fed Chair Jerome Powell, whose term expires in May. (Powell’s term as a member of the Board of Governors is set to continue till 2028.)
Trump’s appointment is widely seen as the culmination of his fight with the Fed to lower borrowing costs, especially as his Administration seeks to frame affordability as a key priority for Republicans ahead of the 2026 midterm elections. Over the past year, Trump has publicly insulted Powell and threatened to fire him as well as tried to remove another Fed governor.
Established by Congress as an independent institution, the Fed is tasked with setting monetary policy free from presidential influence. The central bank’s mandate is to maintain low, stable inflation while promoting a strong job market.
Here’s what to know about Warsh and what his nomination means for the Fed.
Kevin Warsh
At 35, Warsh became the youngest ever Fed governor when he joined the central bank in 2006. He served as the central bank’s main liaison to Wall Street during the 2008 financial crisis. Prior to joining the central bank, Warsh worked as a mergers and acquisitions banker at Morgan Stanley from 1995 to 2002 and as an economics adviser in the George W. Bush Administration.
Warsh has argued in favor of a dramatic overhaul of the central bank. At an April lecture hosted by the Group of Thirty, an international body of economists and financial leaders, Warsh said “the Fed’s current wounds are largely self-inflicted.” He told CNBC in July that the Fed needs “regime change in the conduct of policy” and “a new Treasury-Fed accord, like we did in 1951 after another period where we built up our nation’s debt and we were stuck with a central bank that was working at cross purposes with the Treasury.”
“That’s the state of things now,” he told CNBC. “So if we have a new accord, then the … Fed chair and the Treasury Secretary can describe to markets plainly and with deliberation, ‘This is our objective for the size of the Fed’s balance sheet.’”
Warsh has pushed for reducing the Fed’s balance sheet—a position that could clash with Trump’s preference for less restrictive monetary policy. Nevertheless, Warsh expressed support for lowering interest rates over the past year and faulted Powell for resisting cuts.
Warsh is currently a fellow at the Hoover Institution and a lecturer at the Stanford Graduate School of Business. He serves on the nonpartisan Panel of Economic Advisers of the Congressional Budget Office. He is married to Jane Lauder, the daughter of billionaire Estée Lauder heir Ronald Lauder, who was reportedly behind Trump’s idea of purchasing Greenland.
Trump considered naming Warsh Fed chair in 2018 before ultimately choosing Powell, a choice that the President has since publicly lamented.
Other candidates
In the course of the Trump Administration’s search for Powell’s replacement, a much longer list of candidates was whittled down to four. Trump has reportedly gone back and forth on who he favored for the job prior to settling on Warsh.
Rieder, chief investment officer of BlackRock’s global fixed income business, was recently considered a front-runner for the job. He lacks government or central banking experience, but his outsider status and Wall Street experience may have appealed to Trump’s desire to reform the institution.
Waller, who currently serves on the Fed’s Board of Governors, has been one of the few members of the board to support lowering interest rates, including dissenting, alongside Stephen Miran, whom Trump nominated to the board on a temporary basis in August, in the central bank’s most recent decision to hold rates steady. Waller has argued, against the general consensus of the board, that Trump’s tariffs will not lead to inflation, although the central bank did heed his view in cutting rates three times last year.
Hassett, the director of the National Economic Council and key economic adviser to the White House, was once also considered a leading candidate for next Fed Chair, but Trump indicated earlier this month that he would likely keep Hassett in his current role. Hassett has been a vocal supporter of Trump’s tariffs.
Fight with the Fed
Trump has waged a sustained campaign against Powell over his resistance to slash interest rates, including suggesting that he could fire the Fed chair, which he is not allowed to do without cause, and sue Powell for “incompetence” over the Fed’s $2.5 billion renovation of its headquarters.
The Fed this week left its benchmark interest rate unchanged at 3.5-3.75% after three consecutive cuts towards the end of 2025. Trump said on Thursday that the rate should be two to three percentage points lower—such low nominal rates have historically tended to accompany periods of weak or slowing economic activity. The economy grew at a 4.4% annualized rate in the third quarter of 2025, according to the Commerce Department. That could rise as high as 5.4% in the fourth quarter, according to the Atlanta Fed.
“We’re paying far too much interest in the Fed,” Trump said. “We should have the lowest interest rate anywhere in the world.”
Earlier this month, the U.S. Attorney’s office in the District of Columbia opened a criminal investigation into Powell over the renovation project. Trump, who said he had no knowledge of the inquiry, and his allies have alleged that Powell mismanaged the project and lied to Congress about its costs. Trump has previously publicly urged the Justice Department to investigate perceived political adversaries and this week announced a new fraud czar who would report directly to the White House and whom Trump signaled would pursue investigations into alleged fraud in Democrat-led states. He also moved to fire Fed governor Lisa Cook over allegations of mortgage fraud in a case that is now before the Supreme Court.
Powell said in response to the probe that the Trump Administration has used the renovations as a pretext to politically pressure the Fed, an institution valued for its independence. He maintained that the Fed has “made every effort to keep Congress informed about the renovation project,” including changes to its costs.
Both Democratic and Republican lawmakers have lambasted the investigation, potentially complicating Warsh’s path to confirmation. Sen. Thom Tillis (R, N.C.), who sits on the Banking Committee and who has publicly opposed Trump on other issues and plans to retire at the end of his term, said he would oppose the confirmation of anyone Trump nominates to replace Powell until the probe is resolved. Sen. Lisa Murkowski (R, Alaska) called the investigation “nothing more than an attempt at coercion.”
Powell had a message for his successor at a press conference Wednesday after the Fed’s rate-setting meeting: “Stay out of elected politics.”
“Our window into Democratic accountability is Congress,” he said. “If you want democratic legitimacy, you earn it by your interactions with our elected overseers.”
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