Trump nominates Kevin Warsh as next Fed chairman: What you need to know

As President Donald Trump’s pick to lead the Federal Reserve, Kevin Warsh is back in the spotlight — and in the hot seat — as he faces lawmakers Tuesday in a powerful confirmation hearing that could shape the future of American monetary policy.

Trump announced that Warsh would replace Jerome Powell at the Fed in January, ending months of speculation about who he would pick to head the world’s most powerful bank. Powell will finish his term as chairman in May.

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“I have known Kevin for a long time, and I have no doubt that he will go down as one of the GREAT Fed Chairs, perhaps the best,” Trump wrote on Truth Social. “On top of everything else, he’s ‘the middle act,’ and he’ll never let you down. Congratulations Kevin!”

Here’s what you need to know about Warsh and his path to the Fed’s top job:

Warsh, born in 1970, earned a bachelor’s degree in public policy from Stanford University and later received a law degree from Harvard University. Like Powell, Warsh has no formal economics degree (Powell earned a bachelor’s degree in politics from Princeton University and a law degree from Georgetown).

Warsh spent time working in the private sector at Morgan Stanley before joining the administration of President George W. Bush in 2002, burning his credentials in Republican policy circles until Bush appointed him to the Fed’s Board of Governors in 2006. At age 35, he became the youngest Fed governor in history.

President Donald Trump announced that Warsh would replace Jerome Powell at the Federal Reserve in January. (Stock)

Since leaving the Fed in 2011, Warsh has served as the Shepard Family Distinguished Visitor in Economics at the Hoover Institution and a visiting scholar at Stanford’s Graduate School of Business. He also serves on the board of UPS and is a trustee of the Group of Thirty and the Congressional Budget Office’s Panel of Economic Advisers.

In 2017, he was considered by Trump to replace Janet Yellen as Fed chair. The president instead chose Powell as his successor. Warsh was also in line to serve as treasury secretary last week before Trump nominated hedge fund manager Scott Bessent.

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Federal Reserve Chairman Jerome Powell has led the bank for eight years. (Nathan Howard/Getty Images)

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Perhaps none of the last Fed Chairs were as critical of Powell as Warsh. He has advocated major changes in the Fed’s policy approach, calling for the central bank’s economic models to be clear and transparent while opposing balance sheet construction.

Despite developing a reputation as one of the Fed’s leading “hawks” during his tenure on the Board of Governors, Warsh had said as recently as last fall that the Fed had room to reduce borrowing costs.

“Rates could come down,” Warsh told Fox News’ “Special Report” in October, “but it would require a regime change at the Fed.”

While he echoed Trump’s calls for Powell to lower interest rates during his run for the central bank’s top job, Warsh was less specific about his preferred monetary policy path. Members of the Senate Banking Committee are likely to press Warsh on those views during his confirmation hearing before the panel.

Kevin Warsh, former governor of the Federal Reserve, speaks during the annual conference of the American Economic Association in Chicago, Illinois, on Jan. 6, 2017. (Daniel Acker/Bloomberg via Getty Images)

As the Fed wrestles with how to set rates and adapt to Trump’s tariffs, Warsh — a former critic of protectionist trade policies — said last summer that rates would not cause permanent inflation.

After last year’s tax announcements, inflation rose sharply during the year and remains closer to 3% than the Fed’s 2% target, although policymakers expect it to be closer to that target by mid-2026 without the tax announcements. Rising inflation and a sluggish labor market have made the outlook for rate cuts difficult and that may continue later this year.

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Still, any notion that Warsh will take an unconventional approach to policy management will stand in contrast to his record at the Fed, where he criticized the central bank’s plan to continue buying Treasury bonds while keeping interest rates low for so long as the job market weakened during the 2008 housing crisis.

Warsh’s ties to Wall Street, reportedly still strong today, allowed him to serve as the Fed’s chief liaison to the banking sector at the time.