Trump nominates Kevin Warsh to replace Jerome Powell as Fed chair

By Bryan Mena, Matt Egan, CNN

Washington (CNN) — President Donald Trump said he is nominating Kevin Warsh to be the 17th chair of the Federal Reserve after Jerome Powell’s term ends in May.

Warsh is a somewhat conventional candidate for Fed chair: a former Fed governor who was previously under consideration to be Treasury secretary in Trump’s second term and was a candidate for the top job at the Fed during Trump’s first term. Warsh was appointed to the Fed in 2006 at the age of 35, making him the youngest person to have ever served on the Fed’s powerful board.

Warsh, now 55, has recently shifted his stance on monetary policy. A former inflation hawk, Warsh now favors lower interest rates, according to numerous public statements he’s made in recent months as Trump launched a reality-show-like spectacle for his Fed chair decision. He’s also called for overhauling the central bank’s workforce.

Selecting a new Fed chair is one of the most important hires any president makes – but the nomination takes on even greater importance under this president. Trump has vowed to drive down the cost of living, and the Fed is responsible for maintaining price stability.

Trump has railed against the Fed and Powell for the past year, berating Powell, his handpicked Fed chair, as a “moron” Thursday.

Trump’s choice for central bank head caps off an extensive search process that at one point considered about a dozen people, from MAGA fixtures such as National Economic Council Director Kevin Hassett to even former Treasury Secretary Janet Yellen, according to Scott Bessent, Trump’s Treasury chief, who led the search. Bessent himself was also under consideration for the role but told Trump he’d prefer to remain in his current position.

The Senate Banking Committee will consider Warsh’s nomination through a public hearing, then the broader Senate chamber will vote on whether or not to confirm him. But even that process may be tainted by the Trump administration’s extraordinary criminal investigation of Powell, a red line that some key Republican senators said Trump crossed that could hold up Warsh’s nomination until the investigation draws to a close.

Trump’s efforts to politicize the Fed’s decisions have threatened to undermine the central bank’s prized independence. Members of the Senate Banking Committee will almost certainly ask Warsh about his shifting policy on interest rates and any potential promises he made to Trump about setting policy. He may also get questions about his father-in-law, Republican mega-donor Ronald Lauder.

Warsh’s bona fides

Warsh worked as a White House economist in the George W. Bush administration. He is currently a visiting fellow at the Hoover Institution, a conservative-leaning think tank at Stanford University.

Although Trump is seeking deep interest rate cuts to turbo-charge US growth, some economists and analysts note that Warsh has a track record of favoring policies that are tough on inflation.

For instance, in April 2009 during the middle of the Great Recession when the unemployment rate was surging, Warsh expressed concern about inflation.

“I continue to be more worried about upside risks to inflation than downside risks,” Warsh said during a Fed meeting, according to minutes that were later released.

He added that he expected the Fed to remove its emergency policy support faster than Fed economists did.

“If Trump wants someone easy on inflation, he got the wrong guy in Kevin Warsh,” Anna Wong, chief US economist at Bloomberg Economics, wrote in a post on X on Thursday.

This story is developing and will be updated.

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