Who is Kevin Warsh? Trump's nominee for the Fed Chairman

The U.S. President Donald Trump said on Friday that he will nominate Kevin Warsh as the next chair of the Federal Reserve, replacing Jerome Powell when his term ends in May. Trump said on Truth Social that he has known Warsh for a long time and called him one of the “GREAT Fed Chairmen” who will never let people down.

Warsh is 55 years old and was on the Fed board from 2006 to 2011. He was the youngest Fed governor ever, appointed at age 35, as stated by AP. He is now a fellow at the Hoover Institution, a conservative think tank, and a lecturer at Stanford Graduate School of Business. Warsh is usually a “hawk,” meaning he prefers higher interest rates to control inflation. This is different from Trump, who wants very low rates.

Kevin Warsh background

During and after the 2008-09 Great Recession, Warsh opposed very low-interest rates and warned that inflation could rise, even though inflation stayed low for many years. Recently, Warsh has said he supports lower interest rates in speeches and opinion pieces. Warsh was chosen over other candidates like Trump’s top economic adviser Kevin Hassett, investment manager Rick Rieder, and current Fed governor Christopher Waller.


If confirmed, Warsh could give Trump more influence over the Fed, which is normally independent from the White House. The Fed chair is one of the most powerful economic positions in the world, controlling interest rates, inflation, employment, and banking regulations in the U.S, as per AP report. Fed rate decisions affect borrowing costs for people, including mortgages, car loans, and credit cards.

Warsh Fed chair

Warsh may first join a temporary seat on the Fed board held by Trump adviser Stephen Miran, and then become chair when Powell’s term ends in May. Despite being a traditional Republican, Warsh has recently supported Trump’s economic policies like deregulation and government spending cuts, which could reduce inflation. Trump has tried to influence the Fed before, including attempting to fire governor Lisa Cook, but the Supreme Court appeared to allow her to stay.

Research shows independent central banks handle inflation better than politicians, because elected leaders often want lower rates to boost growth, which can increase prices. Trump wants a Fed chair who will cut interest rates to lower borrowing costs like mortgages and government debt, even though the Fed does not directly control all these costs.

Warsh career and Fed Policy

Even as chair, Warsh is just one of 19 members on the rate-setting committee, as cited by AP. Other members may resist big rate cuts, and financial markets could react badly if rates fall too fast. Trump had considered Warsh as Fed chair during his first term but chose Powell instead. Warsh’s father-in-law, Ronald Lauder, is a Trump supporter and donor. Before the Fed, Warsh was an economic aide in George W. Bush’s administration and worked as an investment banker at Morgan Stanley.

Warsh worked closely with Fed Chair Ben Bernanke during the 2008-09 financial crisis. Bernanke called him a close adviser with strong political and Wall Street knowledge. During the recession, Warsh warned that very low rates could cause inflation, but inflation stayed low even after rates were near zero. Recently, Warsh criticized the Fed for focusing on issues like climate change and diversity, saying these are outside its main role, and called for a “regime change”, as noted by AP.

If Warsh becomes chair, it would mean big changes at the Fed compared to current policies. In a July CNBC interview, Warsh said Fed policy “has been broken for quite a long time” and blamed the Fed for allowing inflation in 2021-22, calling it the “greatest mistake in macroeconomic policy in 45 years”.

FAQs

Q1. Who is Kevin Warsh, Trump’s Fed nominee?

Kevin Warsh is a former Fed governor and economic adviser now nominated by Trump to become the next Fed chair.

Q2. What could Warsh do as Fed chair?

Warsh could influence interest rates, inflation, and economic policy, giving Trump more control over the Federal Reserve.