Trump taps Kevin Warsh to be the next Fed chair
President Donald Trump nominated former Federal Reserve governor Kevin Warsh on Friday morning to be the next Federal Reserve chair, elevating a policymaker who has long prioritized combating inflation and lambasted the central bank.
Trump made the announcement on Friday morning for his pick to replace Fed Chair Jerome Powell once his term is up in May. He praised Warsh
"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 wrote in a social media post. "On top of everything else, he is 'central casting,' and he will never let you down."
As recently as Thursday, Trump was teasing when he'd make one of his most important nominations in his second term. The White House had punted the timeline repeatedly as Trump cycled through in-person interviews on his four-person shortlist.
It caps a four-month-long reality TV-style selection process that at one point fluctuated between two men named Kevin: Warsh and Kevin Hassett, the White House National Economic Council director.
Hassett was once considered the frontrunner until the Department of Justice opened a criminal probe into Powell. It raised questions among analysts and Fed observers about whether he'd keep the Fed separate from the executive branch.
Warsh's career started off at Morgan Stanley in 1995, working as a financial adviser on mergers and acquisitions across the banking, tech, and manufacturing sectors.
Warsh, 55, has long cultivated close ties with the Republican establishment and global financiers. He joined the Bush administration as an economic adviser in 2002. Later on, then-President George W. Bush nominated him to be a Fed governor only four years later, serving as the central bank's chief liaison to Wall Street from 2006 to 2011.
He developed a reputation as a so-called inflation hawk, or Fed policymaker who prioritizes combating inflation. Warsh was also instrumental in the Fed's key decisions during the 2008 financial crisis, and he helped broker the sale of Bear Sterns to JP Morgan Chase in the early days of the meltdown.
In his first term, Trump almost picked Warsh to be the next Fed chair — despite his occasional criticism of trade barriers — before settling on Powell. Yet Trump quickly grew frustrated with Powell once he began raising interest rates. At one point, the president shared his disappointment with Warsh in blunt terms.
“I would have been very happy with you,” Trump said at a Jan. 2020 signing ceremony at the White House. “I could have used you a little bit here. Why weren’t you more forceful when you wanted that job?”
Warsh's path to Senate confirmation is rocky, at least for the time being. Until the DOJ wraps up the Powell investigation, Republican Sen. Thom Tillis has vowed to block any nominee to the Fed. He wields a tie-breaking vote on the Senate Banking Committee, which handles Fed nominatons.