President Donald Trump has nominated former Federal Reserve governor Kevin Warsh to succeed Jerome Powell as chair of the U.S. central bank, capping a prolonged and politically charged search that has unfolded against rising scrutiny of the Fed’s independence.
Announcing the decision on Friday via Truth Social, Trump praised Warsh, 55, as a trusted figure with the credentials to lead the institution. “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,” the president wrote.
Warsh’s nomination is not expected to trigger major market volatility, given his prior experience at the Fed and his standing in financial circles. David Bahnsen, chief investment officer at The Bahnsen Group, said Warsh commands broad market confidence despite the political noise surrounding the appointment. “He has the respect and credibility of the financial markets,” Bahnsen said, noting that near-term rate cuts were already widely anticipated regardless of who emerged as chair.
Powell, who has led the Fed since 2018, has endured sustained pressure from Trump over interest rate policy. The president repeatedly urged aggressive rate cuts and continued his criticism even after the Fed delivered three reductions toward the end of 2025. Trump has also faulted Powell over cost overruns tied to the Fed’s extensive headquarters renovation in Washington.
Warsh has not shied away from criticising the institution he may soon lead. In a CNBC interview last summer, he called for “regime change” at the Fed, arguing that its current leadership had lost credibility. Such remarks have raised questions about how he would navigate the consensus-driven culture that underpins monetary policy decisions.
The nomination comes at a delicate moment for the central bank. Inflation remains above the Fed’s 2% target, government borrowing continues to climb, and the institution is facing rare political and legal pressures. Most recently, the Justice Department subpoenaed Powell over the construction project, prompting the Fed chair to describe the move as a “pretext” aimed at forcing looser monetary policy.
Warsh’s emergence ends a crowded contest that at one stage featured 11 contenders, including former and current Fed officials, prominent economists and Wall Street executives. The process, overseen by Treasury Secretary Scott Bessent, was gradually narrowed before Trump signalled last week that a final decision had been made.
Confirmation may prove difficult. Republican Senator Thom Tillis has warned he will block Fed nominations until the Justice Department’s probe is resolved. Beyond Capitol Hill, the economic backdrop remains fraught, with inflation still elevated and a slowing labour market reflecting a cautious hiring environment.
Financial markets are largely pricing in policy continuity. Traders expect no more than two additional rate cuts this year, with the benchmark federal funds rate settling near 3%, a level widely viewed as neutral for economic growth.
Powell’s next move also remains uncertain. Although past Fed chairs have typically resigned from the board after losing the chairmanship, Powell still has two years remaining as a governor and could choose to stay on. His decision may intersect with a Supreme Court case examining Trump’s attempt to remove Governor Lisa Cook, a ruling that could reshape the balance of power between the White House and the Federal Reserve.
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