Who Is the New Fed Chair?

Key Takeaways

President Trump announced his intention to nominate former Fed official Kevin Warsh as the next chairman.
Warsh is described as an establishment Republican and former Fed insider, serving on the Fed board from 2006 to 2011.
He became a critic of central bank policies, particularly quantitative easing, and raised concerns about "easy money."

In 2017, President Trump considered Warsh but chose Jerome Powell, reportedly due to a preference for lower interest rates.
Trump later expressed public displeasure with Powell for raising interest rates starting in 2018.
Trump advocates for interest rates as low as 1%.

Kevin Warsh has criticized the Fed's reliance on economic models, viewing the institution as a potential obstacle to growth.
He advocates for more discussion of diverse ideas and less groupthink within the Fed, and believes policy reforms would strengthen the economy.
Warsh recently stated on Fox News that the Fed should cut interest rates, echoing his November op-ed.
The new Fed chair faces challenges including slowing job growth and inflation above the 2% goal for five years.

Warsh's Senate confirmation faces a hurdle due to an ongoing Department of Justice criminal investigation into current Fed Chair Jerome Powell.
Senator Tom Tillis stated he will not vote for any Fed nominees until the probe is resolved.
Tillis cited concerns about interference with the Fed's independence, contrasting Warsh's recent downplaying of such concerns.
Warsh's 2010 speech emphasized Fed independence, differing from his current public statements.

The upcoming Fed transition under Kevin Warsh is described as the most unusual in generations.
Warsh promises significant disruption in policy, communication, and bank regulation.
Implementing these changes will be a gradual process, requiring consensus-building with colleagues.
President Trump explicitly desires a Fed chair who aligns with his interest rate policies.