President Donald Trump announced Friday that former Federal Reserve official Kevin Warsh will replace Jerome Powell as Federal Reserve chairman when Powell’s term expires in May, setting the stage for a contentious confirmation process and renewed debate over the independence of the central bank.
Trump made the announcement on Truth Social, praising Warsh’s experience and signaling confidence in his leadership. “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,” the president wrote. “On top of everything else, he is ‘central casting,’ and he will never let you down.”
The decision comes after years of public tension between Trump and Powell. Trump originally nominated Powell to lead the Federal Reserve in 2017 but has repeatedly criticized him for resisting aggressive interest rate cuts. Those criticisms intensified this week after the Federal Reserve decided to hold interest rates steady at a Wednesday meeting. Trump responded on social media by calling Powell a “moron” and accusing him of imposing unnecessary costs on the economy by keeping rates elevated.
The announcement also follows a new layer of controversy surrounding Powell. Last month, the Trump Justice Department issued a subpoena to Powell related to his testimony before the Senate Banking Committee last June. In a statement addressing the investigation, Powell said, “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”
Warsh previously served on the Federal Reserve Board from 2006 to 2011, a period that included the global financial crisis. Since leaving the Fed, he has been a fellow at the Hoover Institution and a lecturer at the Stanford Graduate School of Business. His nomination will require Senate confirmation.
In recent years, Warsh has been outspoken in his criticism of the current Federal Reserve leadership. He has advocated for cutting interest rates and last summer called for “regime change” at the Fed. “The credibility deficit lies with the incumbents that are at the Fed, in my view,” Warsh said at the time.
According to the president, the administration considered at least eleven candidates for the position, including Federal Reserve Governor Christopher Waller, BlackRock bond chief Rick Rieder, and National Economic Council Director Kevin Hassett. Trump has made clear that his priority is appointing a chair who supports significantly lower interest rates. Current rates stand at 3.5 to 3.75 percent, while Trump has argued they should be cut to 1 percent.
Despite Warsh’s credentials, his path to confirmation may be complicated. Republican Senator Thom Tillis of North Carolina said he will oppose the confirmation of any Federal Reserve nominee until the Justice Department ends its investigation into Powell. Tillis, who is retiring at the end of his term, described Warsh as qualified but said he would continue to block the nomination “until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved.”
“The Department of Justice continues to pursue a criminal investigation into Chairman Jerome Powell based on committee testimony that no reasonable person could construe as possessing criminal intent,” Tillis wrote. “Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.”
