By Obinna Uballa
United States President Donald Trump on Friday announced Kevin Warsh as his choice to succeed Jerome Powell as chairman of the Federal Reserve, bringing an end to a months-long selection process that has unfolded amid unusual turbulence for the U.S. central bank.
“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 wrote in a Truth Social post announcing the nomination.
Warsh, 55, is a former Fed governor with extensive Wall Street experience, a background that suggests his appointment may not rattle markets despite the political fanfare surrounding the selection. “He has the respect and credibility of the financial markets,” said David Bahnsen, chief investment officer of The Bahnsen Group, on CNBC’s Squawk Box. “There was no person who was going to get this job who wasn’t going to be cutting rates in the short term. However, I believe longer term he will be a credible candidate.”
Since his confirmation in 2018, Powell has faced persistent criticism from Trump, who repeatedly pressed the Fed to lower interest rates aggressively. Even after three consecutive rate cuts in late 2025, the president continued to attack Powell, citing cost overruns in the Fed’s extensive Washington, D.C. headquarters renovation as part of his criticisms.
Warsh himself has previously signalled a willingness to challenge the status quo at the Fed. In an interview with CNBC last summer, he called for “regime change” at the central bank, noting that “the credibility deficit lies with the incumbents that are at the Fed, in my view.” Analysts say that stance could put him at odds with the consensus-driven culture that defines Fed policymaking.
The nomination arrives at a particularly sensitive moment for the U.S. central bank. Inflation has yet to return to the Fed’s 2% target, government borrowing is on the rise, and the institution is under unprecedented political scrutiny. Recently, the Justice Department subpoenaed Powell over the Fed’s construction project, prompting him to respond that the move was a “pretext” intended to push the Fed toward politically influenced rate decisions.
Trump’s pick concludes a competitive and highly publicized selection process that initially featured 11 candidates, ranging from former Fed officials to prominent economists and Wall Street executives. Treasury Secretary Scott Bessent led the interviews, which eventually narrowed the field to a final handful of contenders.
Observers say the road ahead for Warsh, however, remains complicated. Republican Senator Thom Tillis has indicated he may block any Fed appointments until the Justice Department’s investigation concludes. Beyond politics, economic conditions pose another challenge: while Trump insists inflation is under control, it remains above target, and the labour market has slowed, creating a cautious hiring environment.
Markets currently anticipate only modest moves from the Fed under Warsh, with traders pricing in up to two additional rate cuts this year before the benchmark federal funds rate settles near 3%, which policymakers consider a long-term neutral level.
Powell’s future at the Fed also remains uncertain. Chairs typically step down when replaced, but Powell has two years left in his term as governor and could remain on the board to defend the institution’s independence. His position may intersect with a pending Supreme Court case challenging Trump’s attempt to remove Governor Lisa Cook, a decision that could redefine presidential authority over Fed appointments.
