Trump names Kevin Warsh as next Federal Reserve chair

President Donald Trump said Friday that he plans to nominate Kevin Warsh as the next chair of the Federal Reserve. Warsh would succeed Jerome Powell, whom Trump has repeatedly attacked for failing to cut interest rates.

“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,” Trump said in a post on his social media platform. “On top of everything else, he is ‘central casting,’ and he will never let you down.”

Powell’s term ends in May.

Trump’s pick is a favorite among Republican circles. Warsh, a former Morgan Stanley investment banker, was a governor on the Fed’s board in the early 2000s after being nominated by then-President George W. Bush. He is now a visiting fellow at Stanford University’s Hoover Institution. Warsh must be confirmed by the Senate to serve as chair.

Trump nominated Powell to the role during his first term, but he later launched a pressure campaign against the central bank over interest rate policy. The president has threatened to fire Powell on many occasions because of the Fed’s refusal to cut rates at Trump’s request. Earlier this month, the Justice Department subpoenaed Powell and threatened him with a criminal indictment after he had testified before the Senate Banking Committee last June. 

The investigation alleges Powell misled Congress about the ongoing $2.5 billion building renovation project at the Fed’s headquarters in Washington. Trump has repeatedly slammed Powell over the cost of the renovations.

But Powell, and every living former Fed chair, denounced the probe as an act of partisanship against the leader of an institution that is designed to be insulated from political pressure.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said in a statement at the time. 

A number of lawmakers also decried the action. Two Republicans on the Senate Banking Committee, Thom Tillis of North Carolina and Kevin Cramer of North Dakota, expressed deep concern over the inquiry. Sen. Lisa  Murkowski, R-Ala., called the investigation “an attempt at coercion,” in a post on X earlier this month.

“My position has not changed: I will oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved,” Tillis said in a statement Friday.

Tilllis is a key vote on the banking committee, which handles confirmation hearings for Fed appointees and has a narrow 13-11 Republican majority.

Sen. Elizabeth Warren, D-Mass., the highest-ranking Democrat on the banking committee, called on her Republican colleagues to block Warsh’s nomination.

“No Republican purporting to care about Fed independence should agree to move forward with this nomination until Trump drops his witch hunts of current Fed Chair Jerome Powell and Governor Lisa Cook,” she said Friday in a post on X.

Trump tried to fire Cook, a member of the Fed’s Board of Governors, in August over allegations Cook had committed mortgage fraud. The case landed at the Supreme Court, and Powell attended oral arguments in support of Cook, citing the case’s importance to the independence of the central bank.

“Warsh was on the Fed in the recovery after the financial crisis and was persistently one of, if not the most, hawkish member of the Fed,” said Justin Wolfers, an economist at the University of Michigan. At the time, Warsh was cautious about lowering interest rates out of concern that cuts would boost inflation.

For Trump, who has mounted a pressure campaign against the central bank in an attempt to force rate cuts, “that’s exactly not who the president wants,” Wolfers said.

That raises concern that “deals were made,” Wolfers said.

“If this were a normal times, I would say this is a totally serious candidate,” Wolfers said. “The problem is we’re not normal in times, and so that just raises a whole bunch of questions about who has promised what, and to who.”

Trump told reporters in the Oval Office on Friday that he is not concerned about Warsh’s nomination progressing through the Senate. He said Warsh has not committed to slashing interest rates but that the pair have spoken about it.

“I don’t want to ask him that question,” Trump said. “I think it’s inappropriate, probably would be allowed, but I want to keep it nice and pure, but he certainly wants to cut rates. I’ve been watching him for a long time.