WASHINGTON: Former Federal Reserve Governor Kevin Warsh has been nominated by US President Donald Trump to head the central bank after Jerome Powell’s term ends in May. The nomination comes as markets responded cautiously to the announcement with global stocks edging higher, the dollar rising, and gold prices dropping.
Warsh, 55, served as a Fed governor from 2006 to 2011 and has advocated for steep interest rate cuts, slimming the central bank’s balance sheet, and easing bank regulations. A Stanford Hoover Institution fellow and Wall Street veteran, Warsh is a long-time Trump confidant.
The nomination now awaits Senate confirmation. Republican Senator Thom Tillis has stated he will oppose any Fed nominee until the Justice Department’s criminal inquiry into Powell is fully resolved. Democrats are likely to oppose Warsh as well, potentially delaying his confirmation.
While Republicans like Christopher Waller and Rick Rieder support Warsh for guiding the Fed and protecting its independence, others have expressed concerns about his ties to Wall Street and potential political influence. Analysts suggest that while Warsh may support lower rates, he is unlikely to pursue the aggressive easing proposed by other candidates.
Markets reacted with caution, influenced by Warsh’s past criticisms of the Fed’s balance sheet policies and interest rate decisions. His nomination comes as the Fed has held its benchmark rate at 3.50-3.75 percent after three cuts in 2025. Markets do not expect further reductions before the June 16–17 meeting, when Warsh is expected to assume leadership.
Warsh’s ties to Wall Street, including his work managing investments for Stanley Druckenmiller and family connections to Ron Lauder (a Trump supporter), place him under close scrutiny. His nomination underscores concerns about potential political influence over monetary policy.