President Trump, who wants to reduce interest rates banks charge on loans, said today (Jan. 30) that he will nominate Kevin Warsh of Stanford to be the next chair of the Fed.
Warsh would replace current chair Jerome Powell when his term expires in May. Trump chose Powell to lead the Fed in 2017 but this year has relentlessly assailed him for not cutting interest rates quickly enough.
“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 posted on his Truth Social site. “On top of everything else, he is ‘central casting,’ and he will never let you down.”
The appointment, which requires Senate confirmation, amounts to a return trip for Warsh, 55, who was a member of the Fed’s board from 2006 to 2011. He was the youngest governor in history when he was appointed at age 35.
Warsh is the Shepard Family Distinguished Visiting Fellow in Economics at Stanford’s Hoover Institution and a visiting scholar at Stanford Graduate School of Business.
He received his bachelor’s from Stanford University and a law degree from Harvard Law School. At Stanford, he studied public policy, with an emphasis on economics and statistics.
Warsh’s father-in-law is Ronald Lauder, heir to the Estee Lauder cosmetics fortune and a longtime donor and confidant of Trump’s.
During the selection process, Walsh got the endorsement of Jamie Dimon, CEO of the world’s largest bank, JPMorgan Chase.
In some ways, Warsh is an unlikely choice for the Republican president because he has long been a hawk in Fed parlance, or someone who typically supports higher interest rates to control inflation. Trump has said the Fed’s key rate should be as low as 1%, far below its current level of about 3.6%, a stance few economists endorse.
During his time as governor, Warsh objected to some of the low-interest rate policies that the Fed pursued during and after the 2008-09 Great Recession. He also often expressed concern at that time that inflation would soon accelerate, even though it remained at rock-bottom levels for many years after that recession ended.
More recently, however, in speeches and opinion columns, Warsh has said he supports lower rates.
Warsh beat out several other candidates, including Trump’s top economic adviser, Kevin Hassett, investment manager Rick Rieder, and current Fed governor Christopher Waller. The Fed’s rate decisions, over time, influence borrowing costs throughout the economy, including for mortgages, car loans and credit cards.
For now, Warsh would likely fill a seat on the Fed’s governing board that was temporarily occupied by Stephen Miran, a White House adviser who Trump appointed in September. Once on the board, Trump could then elevate Warsh to the chair position when Powell’s term ends in May.
Since Trump’s re-election, Warsh has expressed support for the president’s economic policies, despite a history as a more conventional, pro-free trade Republican
In a January 2025 column in The Wall Street Journal, Warsh wrote that “the Trump administration’s strong deregulatory policies, if implemented, would be disinflationary. Cutbacks in government spending — inspired by DOGE — would also materially reduce inflationary pressures.”
Lower inflation would allow the Fed to deliver the rate cuts the president wants.
If confirmed by the Senate, Warsh would face challenges in pushing interest rates much lower. The chair is just one member of the Fed’s 19-person rate-setting committee, with 12 of those officials voting on each rate decision. The committee is already split between those worried about persistent inflation, who’d like to keep rates unchanged, and those who think that recent upticks in unemployment point to a stumbling economy that needs lower interest rates to bolster hiring.
Prior to serving on the Fed’s board in 2006, Warsh was an economic aide in George W. Bush’s Republican administration and was an investment banker at Morgan Stanley. Warsh worked closely with then-Chair Ben Bernanke in 2008-09 during the central bank’s efforts to combat the financial crisis and the Great Recession. Bernanke later wrote in his memoirs that Warsh was “one of my closest advisers and confidants” and added that his “political and markets savvy and many contacts on Wall Street would prove invaluable.”
Warsh has become harshly critical of the Fed, calling for “regime change” and assailing Powell for pushing banks to make lending decision in part based on climate change and DEI, which Warsh said are outside the Fed’s mandate.
His more critical approach suggests that if he does ascend to the position of chair, it would amount to a sharp transition at the Fed.
In a July interview on CNBC, Warsh said Fed policy “has been broken for quite a long time.”
“The central bank that sits there today is radically different than the central bank I joined in 2006,” he added. By allowing inflation to surge in 2021-22, the Fed “brought about the greatest mistake in macroeconomic policy in 45 years, that divided the country.”