Federal Reserve gets a new chair: Trump taps former Fed governor Kevin Warsh

President Donald Trump announced Friday that he intends to nominate former Federal Reserve governor Kevin Warsh as the next chair of the Fed , replacing Jerome Powell when his term expires in May. The move marks a potential turning point for the central bank, raising questions about its independence and future monetary policy direction.

Warsh, 55, served on the Fed’s board from 2006 to 2011, becoming the youngest governor in its history at age 35. He currently teaches at Stanford Graduate School of Business and is a fellow at the conservative Hoover Institution . While Warsh was traditionally considered a “hawk,” supporting higher interest rates to curb inflation, his recent writings indicate support for lower rates in line with Trump’s economic priorities.

Trump’s choice follows a highly publicized search, reflecting the significance of the Fed chair role, which shapes interest rates, inflation control, and employment policy, and indirectly affects borrowing costs for mortgages, loans, and credit cards.

The nomination underscores Trump’s efforts to assert greater control over the central bank. Since his reelection, the president has repeatedly criticized Powell for not lowering rates quickly enough and has openly called for policies aimed at reducing borrowing costs to support federal debt management and revive the housing market.

Warsh’s confirmation, however, is not guaranteed. The Fed’s 12-member rate-setting committee, which votes on policy changes, is currently split between those concerned about persistent inflation and others advocating rate cuts to stimulate growth. Aggressive rate reductions for political reasons could also unsettle financial markets, potentially driving up long-term interest rates.

Warsh has voiced criticism of Powell’s leadership, particularly over initiatives like climate action and diversity programs, which he says are beyond the Fed’s mandate. If confirmed, Warsh’s tenure could mark a sharp departure from the current Fed approach, emphasizing a more narrowly focused central bank.

Before joining the Fed, Warsh was an economic aide in George W. Bush ’s administration and an investment banker at Morgan Stanley. He worked closely with former Fed Chair Ben Bernanke during the 2008-09 financial crisis, earning recognition for his economic insight and market acumen.

Warsh also has close personal ties to Trump’s circle: his father-in-law is Ronald Lauder , a longtime Trump supporter and donor. Analysts say the nomination reflects both Warsh’s experience and the president’s desire for a more sympathetic Fed leadership aligned with his economic agenda.

The Senate must confirm Warsh before he can assume the role, a process that will draw close attention from markets, economists, and policymakers.