Donald Trump has chosen former Federal Reserve Governor Kevin Warsh to become the next chairman of the US central bank, confirming the long‑anticipated decision on his Truth Social platform.Mr Warsh will replace Jerome Powell when his term ends in May, ending months of speculation over the future leadership of the world’s most influential monetary authority.The President praised his nominee in typically emphatic terms, saying Mr Warsh “will go down as one of the GREAT Fed Chairmen, maybe the best”, and adding that he had “known Kevin for a long period of time” and believed he would “never let you down”.Mr Warsh, 55, previously served on the Federal Reserve Board from 2006 to 2011, a period that spanned the global financial crisis.
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During his tenure he developed a reputation as a monetary policy hawk, often favouring tighter settings and warning about inflation risks.He currently holds a fellowship at the Hoover Institution, a conservative‑leaning think tank, and sits on the board of UPS.In recent years, analysts say his stance has shifted.Mr Warsh is now viewed as more open to interest rate cuts and has become an outspoken critic of the central bank’s approach, questioning its reliance on economic data and its management of its balance sheet.As speculation about his candidacy intensified, he escalated his criticism, calling for what he described as a “regime change” at the Federal Reserve.His nomination comes at a moment of heightened concern over the central bank’s independence.Mr Trump has repeatedly attacked Powell for not cutting interest rates quickly enough, while federal prosecutors have launched a criminal investigation into Powell’s Senate testimony regarding renovations to Federal Reserve buildings.Mr Powell has rejected the inquiry, describing it as an attempt by the administration to influence monetary policy by shifting the balance of voting power on the Federal Open Market Committee.LATEST DEVELOPMENTSEx-CNN journalist arrested after anti-Ice protest inside church’Not a good look!’ Republican urges Keir Starmer to ‘focus on UK’ amid Donald Trump China warning’It’s very dangerous!’ Donald Trump lashes out at Keir Starmer over PM’s China tripThe investigation has prompted widespread reaction.Former Fed chairs and senior central bankers globally have publicly backed Mr Powell, while members of both parties on the Senate Banking Committee have expressed support for him.Financial markets responded positively to Mr Warsh’s nomination, with investors appearing relieved that Mr Trump had not selected a more aggressive advocate of rapid rate cuts.As rumours of his appointment circulated, the US dollar strengthened and gold prices fell by six per cent.Stuart Clark, portfolio manager at Quilter, said investors would be “breathing somewhat of a sigh of relief”, noting that Mr Warsh “comes to the role with a level of authority that is respected across the market” and had previously been considered for the position in 2017.Stephen Brown, deputy chief North America economist at Capital Economics, described him as “a relatively safe choice”, saying Mr Warsh’s long‑standing hawkish views may help counter concerns that he could become overly aligned with the president.Mr Warsh must now be confirmed by the US Senate, a process that could face delays.Republican Senator Thom Tillis, who sits on the Senate Banking Committee, has said he will oppose Mr Trump’s nominees until the potential legal case involving Powell is resolved.The committee, which has voiced support for Mr Powell during the Department of Justice investigation, will oversee the confirmation process.Mr Trump has also targeted current Fed governor Lisa Cook, seeking her removal over allegations of mortgage fraud, which she denies. The Supreme Court is examining the case.Once in office, Mr Warsh’s approach to interest rates and central bank governance will be closely watched by markets and policymakers, with particular scrutiny on how independently he operates from the President.
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