Trump Nominates Kevin Warsh to Lead Federal Reserve, Replacing Jerome Powell

President Donald Trump on Friday nominated Kevin Warsh to succeed Jerome Powell as chair of the Federal Reserve, ending a months-long selection process marked by unusual political pressure on the central bank.

In a post on Truth Social, Trump praised Warsh as a long-time confidant and predicted he would become “one of the GREAT Fed Chairmen.” Warsh, 55, previously served as a Federal Reserve governor and is widely viewed on Wall Street as an experienced policymaker unlikely to simply follow White House directives.

Market reaction was muted. Stock futures dipped modestly early Friday but pared losses as investors digested the news. Analysts suggested the nomination was largely priced in, given Warsh’s familiarity with monetary policy and his credibility with markets.

“He has the respect and credibility of the financial markets,” said David Bahnsen, chief investment officer at The Bahnsen Group, adding that near-term rate cuts were likely regardless of who took the role.

Warsh has been openly critical of the Fed’s recent leadership. In an interview last summer, he called for a “regime change” at the central bank, arguing that incumbents had lost credibility—comments that could set up tension inside an institution built on consensus.

The nomination comes at a precarious moment for the Fed. Inflation remains above the Fed’s 2% target, government borrowing is rising, and political scrutiny of monetary policy has intensified.

The Justice Department’s subpoena of Powell over cost overruns tied to the Fed’s Washington headquarters renovation has further fueled debate about central bank independence. Powell has described the probe as a “pretext” to pressure the Fed into easing policy.

Warsh emerged from a crowded field that included current Fed Governor Christopher Waller, BlackRock bond chief Rick Rieder, and National Economic Council director Kevin Hassett. Treasury Secretary Scott Bessent led the interview process.

Confirmation, however, is far from assured. Sen. Thom Tillis said he would block any Fed nominees until the Justice Department’s investigation into Powell is resolved, while Sen. Tim Scott, chair of the Senate Banking Committee, voiced support for Warsh’s nomination.

Markets are not expecting dramatic policy shifts. Traders are pricing in at most two additional rate cuts this year, with the benchmark fed funds rate settling near 3%, the Fed’s estimated long-run neutral level.

One unresolved question is Powell’s future. Although Fed chairs typically step down from the board after being replaced, Powell still has two years remaining as a governor and could choose to stay on—potentially becoming a focal point in broader legal and political battles over the limits of presidential power over the central bank.