Donald Trump has nominated Kevin Warsh to become the next chair of the US central bank, the Federal Reserve.
Warsh previously served as a Federal Reserve governor from 2006 to 2011 and has recently re-emerged as a leading candidate as speculation grew over who would replace the current chair, Jerome Powell.
The nomination comes at a sensitive moment for the Fed’s independence. Trump has repeatedly criticised Powell, accusing him of moving too slowly to cut interest rates. Tensions escalated further after federal prosecutors opened a criminal investigation into testimony Powell gave to the Senate about renovations to Fed buildings. Powell strongly denied any wrongdoing and received public support from former Fed chairs and central bank leaders.
Announcing the nomination on Truth Social, Trump praised Warsh, saying he would “go down as one of the GREAT Fed Chairmen, maybe the best.”
Warsh is a 55-year-old economist, a fellow at the conservative Hoover Institution, and a board member at delivery giant UPS. He was also considered for the Fed’s top job during Trump’s first term.
Over the years, Warsh has been a vocal critic of the Federal Reserve, questioning its heavy reliance on economic data and its use of a large balance sheet. More recently, he has sharpened his criticism, even calling for “regime change” at the central bank.
During his time as a Fed governor, Warsh was known as a “hawk,” meaning he generally supported higher interest rates to control inflation. However, he is now viewed as someone who would back lower rates in the near term. He has argued that shrinking the Fed’s balance sheet could help reduce short-term interest rates, though some economists dispute this reasoning.
Trump has publicly supported Warsh’s stance, telling the Wall Street Journal that Warsh believes interest rates should be lowered — a view Trump says is widely shared.
Warsh also has close personal ties to Trump’s circle. He is married to Jane Lauder of the Estée Lauder family, and his father-in-law, billionaire Ronald Lauder, is a longtime Trump donor and ally.
The nomination must still be approved by the US Senate, a process that could take time. Republican Senator Thom Tillis, who sits on the Senate Banking Committee, has previously said he would block Fed nominations until the investigation into Powell is resolved.
Before the announcement, Warsh was considered one of four top contenders for the role, alongside White House economic adviser Kevin Hassett, current Fed governor Christopher Waller, and bond market veteran Rick Rieder.
Financial markets are expected to closely monitor how independent Warsh is from President Trump if he takes office. Stephen Brown, deputy chief North America economist at Capital Economics, described Warsh as a “relatively safe choice,” saying his traditionally hawkish views could ease fears that he would simply follow Trump’s demands.
As news of Warsh’s nomination began to circulate, the US dollar strengthened slightly, while gold prices fell by 6%.
Stuart Clark, a portfolio manager at Quilter, said investors were likely to feel reassured. He noted that Warsh’s previous consideration for the role in 2017 gives him credibility and respect in financial markets.
“Concerns about Fed independence should now be reduced,” Clark said, “but Warsh’s actions and decisions will be watched very closely.”