US President Donald Trump has nominated Kevin Warsh, a former Federal Reserve governor and outspoken central bank critic, to lead the US Federal Reserve, a move that has sharpened focus on the future independence of the world’s most powerful central bank.
Markets reacted cautiously to reports of Warsh’s nomination. The dollar strengthened slightly, while gold prices fell sharply. Analysts said investors appeared reassured by Warsh’s experience and perceived credibility.
Warsh, 55, served on the Fed’s Board of Governors from 2006 to 2011, a period that included the global financial crisis. His name had resurfaced in recent weeks as speculation mounted over who would replace incumbent Fed chair Jerome Powell, who has faced mounting pressure from Trump over interest rate policy.
Trump has repeatedly criticised Powell for not cutting interest rates aggressively enough. Tensions escalated further after federal prosecutors opened a criminal investigation into Powell’s Senate testimony related to renovations at Fed buildings, prompting a strong defence from Powell and public backing from former Fed chairs and global central bank leaders.
Announcing the nomination on his Truth Social platform, Trump praised Warsh as someone who would be remembered as “one of the great Fed chairmen”.
Warsh is currently a fellow at the conservative-leaning Hoover Institution and serves on the board of courier firm UPS. He was also considered for the Fed’s top job during Trump’s first term. Over the years, he has been a vocal critic of the Fed’s policy framework, questioning its heavy reliance on economic data and its expanded balance sheet.
While Warsh earned a reputation as a policy hawk during his earlier tenure at the Fed, prioritising inflation control and higher interest rates, he is now seen as more open to near-term rate cuts. He has argued that shrinking the Fed’s balance sheet could help lower short-term borrowing costs, though some economists have challenged this view. Warsh also has close personal links to Trump’s inner circle.
The nomination still requires Senate confirmation and could face delays. Republican Senator Thom Tillis has said he will oppose Fed nominations until the legal issues surrounding Powell are resolved.