Trump Taps Kevin Warsh for Fed Chair, Banking on a Traditionalist for an Unconventional Era
WASHINGTON (AP) — In a move that could reshape U.S. monetary policy, President Donald Trump announced his intention to nominate Kevin Warsh, a former Federal Reserve governor, to lead the central bank. The decision, set for a May transition, signals Trump's push for a Fed chair who he believes will deliver the robust economic growth long promised to voters.
Trump's description of Warsh as coming from "central casting" underscores the nominee's conventional appearance and establishment pedigree. At 55, Warsh possesses the classic resume of a central banker: degrees from Stanford and Harvard Law, early tenure as the youngest Fed governor, and experience navigating the 2008 financial crisis alongside then-Chair Ben Bernanke. Yet his potential ascension comes at a fraught moment. The President has publicly pressured the Fed to slash benchmark interest rates to White House specifications, placing the institution's cherished independence in the spotlight.
Analysts warn that aggressive rate cuts, while potentially providing a short-term growth jolt, risk overheating an economy where inflation remains a persistent concern and housing affordability weighs heavily on households. Warsh's nomination follows Trump's expressed regret over selecting Jerome Powell in 2017, whom he now criticizes after initially praising him.
Warsh's career bridges Wall Street, Washington, and academia. After a stint as an investment banker at Morgan Stanley and a role in the George W. Bush administration, he served on the Fed's Board of Governors from 2006 to 2011. Bernanke later credited him as "one of my closest advisers" during the crisis, valued for his Wall Street connections. However, records show Warsh occasionally advocated for tighter policy during the recession's depths, warning in 2008 about inflationary risks that ultimately did not materialize.
His personal life also ties him to Republican power circles; he is married to Jane Lauder, daughter of billionaire GOP donor Ronald Lauder.
In recent months, Warsh has waged a quiet campaign for the role, sharpening his critique of the current Fed. He has called for a "regime change," faulting Powell for venturing into climate and social equity issues. In a Wall Street Journal op-ed, he argued inflation stems from excessive government spending and money printing, not an overheated labor market. He posits that artificial intelligence will act as a "significant disinflationary force," boosting productivity without spurring price rises—a view that aligns with Trump's optimistic economic outlook.
The nomination sets the stage for a Senate confirmation battle focused on the Fed's mandate, its independence, and the right policy mix for an uncertain economy.
Voices from the Street
Eleanor Vance, Chief Economist at Meridian Trust: "Warsh is a serious, credentialed candidate. His crisis-era experience is invaluable. The real question is whether he can navigate the political pressures that are now unprecedented. His recent critiques suggest he's willing to chart a new course, but the Fed's institutional credibility must be his north star."
Marcus Thorne, Policy Analyst at the Economic Justice Institute: "This is a profoundly dangerous pick. Warsh's record shows a tendency to worry about phantom inflation while real people were losing jobs and homes in 2009. His cozy relationships with Wall Street and now, a President demanding subservience, threaten to turn the Fed into a political tool. It's a betrayal of the public trust."
Dr. Aris Chen, Professor of Monetary Economics at Stanford: "His academic work at Hoover has been rigorous. The AI-productivity thesis is debated, but it's a substantive argument. His challenge will be to demonstrate intellectual independence from both political parties and communicate a clear, steady strategy to markets."