President Trump said Friday he is nominating Kevin Warsh to serve as the next chair of the Federal Reserve Board, filling a powerful economic policy role as the president pushes for lower interest rates.
Mr. Trump made the announcement on his Truth Social platform.
Warsh was a member of the Fed’s board for five years starting in 2006, when former President George W. Bush named him to the central bank right before the financial crisis. In recent years, he has worked with billionaire investor Stanley Druckenmiller and held academic positions, including at the Hoover Institution.
Alastair Grant / AP 
If confirmed by the Senate, Warsh will helm a Federal Reserve that has faced months of intense pressure from Mr. Trump to dramatically slash rates — a move that could boost economic growth, but at the risk of sparking higher inflation. The Fed has lowered rates three times since September, most recently on Dec. 10, but Fed officials indicated in a projection earlier this month that they expect just one cut this year.
Warsh suggested earlier this year he’s open to lower interest rates, and he’s been deeply critical of the Fed’s handling of inflation in recent years, arguing the central bank has a “credibility crisis” and is in need of “regime change.” But he has also called it “essential” that the Fed maintain its independence over monetary policy.
Warsh was picked to replace outgoing Federal Reserve Chair Jerome Powell, who has drawn Mr. Trump’s ire for the Fed’s perceived slow pace of lowering rates. The president has called Powell a “dumb guy,” a “stubborn mule” and “Mr. Too Late,” and has mused about firing him.
Then, in a surprise video announcement earlier this month, Powell said the Fed had received subpoenas threatening him with criminal charges over a pricey project to renovate the central bank’s D.C. headquarters. Powell argued the investigation was part of an attempt to intimidate the Fed for its interest rate decisions, undermining its independence. The White House said Mr. Trump didn’t direct the Justice Department to issue the subpoenas.
Powell was initially appointed Fed chair by Mr. Trump in 2018, and was named to a second four-year term by former President Joe Biden.
In an opinion piece earlier this year, economist Kenneth Rogoff said Warsh is “highly regarded” but “even more hawkish than Powell,” meaning he tends to support higher interest rates.
The discord over Powell could make it more difficult to confirm Warsh. Several Senate Republicans sharply criticized the Justice Department’s subpoenas, with Sen. Thom Tillis of North Carolina vowing to oppose all Fed nominees “until this legal matter is fully resolved.”
Some Fed-watchers also think the subpoenas might make Powell more likely to stay on the Federal Reserve’s seven-member board as a rank-and-file member after his term as chair ends in May. Most Fed chairs have resigned from the board after they’re no longer the boss, but Powell can remain a board member until early 2028, diluting Mr. Trump’s influence.
