Trump officially nominates Kevin Warsh as Fed chair to replace Jerome Powell

President Donald Trump officially asked the Senate to consider Kevin Warsh, a former Federal Reserve governor, to ‌be the central bank’s next chair.

The formal nomination is the first step in what could be an uphill battle for the president as he sets out to install a rate cut-friendly economist at the helm of the Fed. Warsh would succeed Jerome Powell, whom Trump has repeatedly attacked for declining to cut interest rates.

If confirmed by the Senate, Warsh would begin his four-year term after Powell’s term ends on May 15. If the White House gets its way, he’d also be confirmed for a 14-year term as a member of the board of governors of the Federal Reserve.

That’s the board seat currently held by Fed governor Stephen Miran, another rate-cut advocate whom Trump nominated in September. Miran’s term expired at the end of January, but he can stay on the board until a successor is confirmed. 

Warsh is a favorite in Republican circles. A former Morgan Stanley investment banker, he was a governor on the Fed’s board in the early 2000s after being nominated by 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.

That process starts with the Senate Banking Committee, which could spell trouble for Trump. Retiring Sen. Thom Tillis, R-N.C., has vowed to block any Fed nomination as long as a Justice Department investigation ​into Powell ​over his testimony ⁠to the panel about Federal Reserve office renovations in Washington remains ongoing. 

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

Tillis, along with GOP Sen. Kevin Cramer of North Dakota, who is also on the committee, has condemned the investigation as an intimidation tactic by Trump. The Justice Department is investigating whether Powell misled Congress about the ongoing $2.5 billion building renovation project at the Fed’s headquarters in Washington. Trump has repeatedly slammed Powell about the cost of the renovations. Powell has defended the project as necessary for safety reasons.

Trump has threatened to fire Powell, whom the president nominated during his first term in office, on many occasions because of the Fed’s refusal to cut rates at his request. 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.