President Donald Trump will on Friday appoint Kevin Warsh to head the Federal Reserve, putting him in charge of a central bank that must navigate a turbulent economy and a president who has very specific expectations on interest rates.
Mr. Warsh, 56, will become the 11th Federal Reserve chairman in the modern banking era, replacing Jerome Powell, who served for eight years.
Powell, a key target of Trump’s ire for refusing to cut interest rates as quickly or significantly as the president had hoped, will remain on the Fed’s board. This was the first move by a Fed chair in about 80 years.
Friday’s swearing-in will be Warsh’s second term at the Fed. He previously served as governor from 2006 to 2011, during which time the central bank worked with Treasury authorities to rescue the economy from the global financial crisis.
Mr. Warsh supported the Fed’s efforts, but later became increasingly critical of the central bank, accusing it of maintaining crisis-era policies and going beyond its mandate to maintain price stability and low unemployment. For example, he cited previous efforts to address climate change and social inequality as areas where the mandate will grow, and vowed to reduce central banks’ influence on markets.
Warsh won his seat after a wide-ranging competition that began in the summer of 2025 and included as many as 11 candidates, ranging from current and former Federal Reserve officials to prominent economists and Wall Street strategists.
Mr. Powell’s tenure was marked by repeated and often personal criticism from Mr. Trump. Even though the Fed has lowered its benchmark borrowing rate by three-quarters of a percentage point and raised it by 4.25 points during President Joe Biden’s term, the president has called for more aggressive action from the Fed on lowering rates and accused Powell of having “Trump Derangement Syndrome.”
Despite President Trump’s calls for rate cuts, markets expect the Fed to keep policy on hold for most, if not all, of 2026, before potentially raising rates in early 2027.
Mr. Powell’s policies were also notable for keeping inflation above the Fed’s 2% target for five consecutive years. Warsh asserted that it is possible to reduce inflation while lowering the benchmark interest rate.
Since leaving the Fed, Mr. Warsh has spent time at Stanley Druckenmiller’s Duquesne Family Office and has lectured at Stanford University and the Hoover Institution. When President Trump made it clear that he would not nominate Janet Yellen, Warsh was considered the frontrunner for the Fed chair, but the president reportedly ultimately chose Powell at the urging of former Treasury Secretary Steve Mnuchin.
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