US President Donald Trump has nominated former Federal Reserve Governor Kevin Warsh to succeed Jerome Powell as chair of the central bank when Powell’s term ends in May.
The announcement concludes months of speculation over who would lead the Fed during Trump’s second term.
Trump made the nomination public on Friday in a post on his Truth Social platform, praising Warsh’s credentials and loyalty.
“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,” Trump wrote.
Warsh, 55, is seen as a compromise choice within Trump’s circle. He has recently supported lower interest rates but has not endorsed the aggressive monetary easing favored by other potential nominees.
The decision follows Trump’s sustained pressure campaign against Powell, whom he appointed during his first term but frequently criticised for resisting faster rate cuts.
Senate Confirmation Battle
Despite optimism in financial markets, Warsh faces a contentious Senate confirmation process.
Lawmakers have signaled heightened scrutiny amid Trump’s repeated attacks on Powell and the Justice Department’s recent criminal investigation into the sitting Fed chair.
Democrats argue the nomination threatens the Fed’s independence. Senator Elizabeth Warren, the leading Democrat on the Senate Banking Committee, called the move “the latest step in Trump’s attempt to seize control of the Fed.”
She cited the Powell investigation and Trump’s push to remove Fed Governor Lisa Cook, now under Supreme Court review.
Republican Senator Thom Tillis said he would withhold support for any nominee until the Powell probe concludes, insisting that protecting the Fed from political interference is “non-negotiable.”
Other Republicans welcomed the nomination. Senator Bill Hagerty said Warsh is “uniquely qualified to refocus the central bank on its statutory mandate.”
The Federal Reserve plays a central role in stabilizing the US and global economy. It manages inflation, promotes maximum employment, regulates banks, and influences borrowing costs across mortgages, auto loans, and consumer credit through its interest rate decisions.
Critics warn Trump’s actions could politicise monetary policy and bend the institution to presidential influence.
Powell and other opponents have cautioned that undermining the Fed’s independence risks destabilizing financial markets.
Warsh’s Background
Warsh currently serves as a fellow at the Hoover Institution and lectures at Stanford’s Graduate School of Business.
He joined the Federal Reserve Board in 2006 at age 35, becoming the youngest governor in its history.
His career includes roles in the George W. Bush administration and investment banking at Morgan Stanley. His father-in-law, Ronald Lauder, is a major Republican donor and longtime Trump confidant.
Though once a proponent of higher interest rates to curb inflation, Warsh has shifted toward looser policy in recent years.
He has sharply criticized current Fed leadership, calling for “regime change” and opposing the institution’s engagement on climate-related issues.
If confirmed, uncertainty remains over whether Powell will step down immediately or complete his term. Past chairs typically exit upon replacement, but current political tensions fuel speculation that Powell may remain.
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