Donald Trump picks Kevin Warsh as new Federal Reserve chair

Kevin Warsh is set to replace Jerome Powell as new US Federal Reserve chairman

US  President Donald Trump on Friday said he had chosen former Federal Reserve Governor Kevin Warsh to head the U.S. central bank.

"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 on his Truth Social platform.

"On top of everything else, he is 'central casting,' and he will never let you down."

If confirmed by the US Senate, Kevin Warsh would assume leadership of the Federal Reserve at a moment of intense political pressure, as the Trump administration steps up its scrutiny of the central bank.

A New York native and former mergers and acquisitions banker at Morgan Stanley, Warsh has recently sharpened his criticism of the Fed, aligning with several policy positions advocated by Trump and his administration.

During Trump’s first term, Warsh was considered as a potential replacement for then-Fed Chair Janet Yellen, before the president ultimately selected Jerome Powell.

US stock index futures cut some losses on Friday, after U.S. President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair.

At 06:51 a.m. ET, Dow E-minis (YMcv1) were down 162 points, or 0.33%, S&P 500 E-minis were down 29.25 points, or 0.42% and Nasdaq 100 E-minis were down 146 points, or 0.56%

Warsh is seen as a comparatively moderate figure, as one of the less radical choices and notably more cautious about deploying heavy monetary stimulus despite his preference for lower rates.

A lawyer and a distinguished visiting fellow in economics at Stanford University's Hoover Institution, Warsh has said he believes the president is right to press the central bank for steep interest-rate reductions, and has criticized the Fed for underestimating the inflation-busting potential of productivity growth supercharged by artificial intelligence.

He has also called for a broad overhaul of the central bank that would slim its balance sheet and ease bank regulations.

Trump's nomination of Powell's successor, who must be confirmed by the Senate, comes amid unprecedented presidential efforts to exert control over the Fed.

As Trump continues to push for lower interest rates to stimulate economic growth, attention will focus on how Warsh navigates the balance between political expectations and the Fed’s institutional autonomy.

The administration has already attempted to remove Fed Governor Lisa Cook over alleged mortgage fraud, triggering a legal battle that could set a precedent on the extent of presidential authority to dismiss senior central bank officials.

In parallel, the Trump administration has launched an investigation into Powell over renovations at the Fed’s headquarters—an inquiry Powell has criticised as a direct threat to the Federal Reserve’s independence.