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Federal Reserve · Interest Rates · Kevin Warsh · Monetary Policy
President Donald Trump officially nominated Kevin Warsh to be the next Federal Reserve Chair, succeeding Jerome Powell when his term concludes in May, with Trump publicly stating his expectation that Warsh will pursue significantly lower interest rates, a shift from Warsh's historical inflation hawk stance.
Warsh, 55, previously served on the U.S. central bank’s Board of Governors from 2006 to 2011 and advised Trump on economic policy. His nomination follows his public alignment with Trump in 2025, advocating for lower interest rates despite his past reputation for caution on inflation.
Following the announcement, the dollar held gains, and US stock futures remained lower, reflecting market uncertainty about Warsh's true policy leanings, as noted by JPMorgan Chase & Co. economist Michael Feroli.
Warsh's Senate confirmation faces complications from a Department of Justice probe into current Chairman Powell's 2025 congressional testimony, with Senator Thom Tillis (R-N.C.) pledging to withhold support for any Fed nominee until the matter is resolved. Investors currently expect interest rates to drop to approximately 3% by the end of 2026, from the current range of 3.5-3.75%.
Trump Nominates Warsh for Fed Chair, Eyes Lower Rates(current)