President Trump has chosen former Federal Reserve Governor Kevin Warsh to replace Jerome Powell as Fed Chair, signaling a major shift toward limiting the central bank’s overreach and restoring pro-growth policies that prioritize American businesses and consumers over bureaucratic control.
Story Highlights
- Trump nominates Kevin Warsh, a former Fed Governor and Wall Street veteran, to succeed Jerome Powell when his term ends on May 23, 2026
- Warsh is a vocal critic of the Fed’s $6.5 trillion balance sheet and regulatory overreach, advocating for reforms to support economic growth
- The nomination comes amid Trump’s long-standing frustrations with Powell over interest rates and a Justice Department probe into the current Fed Chair
- Warsh’s appointment could bring lower rates, reduced banking regulations, and a Fed focused on price stability rather than expansive government agendas
Trump Ends Lengthy Search with Warsh Nomination
President Trump announced on Friday, January 30, 2026, via Truth Social, his intention to nominate Kevin Warsh as Federal Reserve Chair, ending a prolonged search for Jerome Powell’s replacement. Trump praised Warsh as potentially “one of the GREAT Chairmen, maybe the best” and noted their long-standing relationship. The nomination comes as Powell’s term concludes May 23, 2026, following years of tension between Trump and the current Chair over interest rate policies. Warsh, who served as the youngest Fed Governor from 2006 to 2011, brings Wall Street experience from Morgan Stanley and crisis management credentials from the 2008 financial collapse.
Fed Reform Advocate Takes Center Stage
Warsh has positioned himself as a fierce critic of the Federal Reserve’s expansion beyond its core mission of price stability. In a November 2025 Wall Street Journal op-ed and spring 2025 speech, he argued the Fed has morphed into a “purpose agency of government” that enables deficit spending through its $6.5 trillion balance sheet accumulated via quantitative easing and pandemic policies. Warsh advocates shrinking this balance sheet to lower interest rates naturally and reduce regulatory burdens on small and medium-sized banks. His philosophy aligns with Trump’s tax cuts and deregulation agenda, contrasting sharply with Powell’s approach that maintained rates at 4.25%-4.5% despite Trump’s demands for cuts to support economic growth and tariff policies.
Wall Street Ties and Crisis Experience Shape Candidate
Warsh’s background blends private sector expertise with government service, offering credibility that conservatives value in Fed leadership. After working at Morgan Stanley, he advised President George W. Bush and served as Fed liaison to Wall Street during the 2008 financial crisis under Chair Ben Bernanke. Following his Fed tenure, he joined Stanford’s Hoover Institution and partnered with prominent investor Stan Druckenmiller. Like Powell, Warsh lacks a formal economics degree, but his hands-on crisis management and Republican connections distinguish him from other candidates like Kevin Hassett. His independence, combined with alignment on growth policies, positions him as a reformer who understands markets without succumbing to academic groupthink that often justifies government overreach.
Trump taps Kevin Warsh to be the next Fed chair: The pick elevates a policymaker who developed a reputation for his hawkish views on inflation https://t.co/nL1Uv5DjIH
— Quartz (@qz) January 30, 2026
Implications for Businesses and Consumers
Warsh’s nomination promises significant shifts in monetary policy that could directly benefit American families and businesses. Short-term expectations include potential rate cuts that would ease borrowing costs for mortgages, car loans, and business credit, addressing affordability concerns stemming from prior Fed decisions. Long-term reforms targeting the Fed’s bloated balance sheet aim to reduce the central bank’s role in enabling reckless government spending that fuels inflation and erodes purchasing power. Small and medium-sized businesses could see relief from Powell-era banking regulations Warsh criticized for disadvantaging them compared to Wall Street giants. However, the nomination faces Senate confirmation amid ongoing Justice Department probes into Powell and a Supreme Court review of Fed independence, adding uncertainty to the transition timeline.
Constitutional Concerns and Fed Independence
The nomination raises critical questions about Federal Reserve independence that resonate with constitutional conservatives. Trump’s public attacks on Powell, including personal nicknames and rate-cut demands, have strained norms around central bank autonomy designed to prevent political manipulation of monetary policy. While Warsh’s reform vision aligns with limiting unelected bureaucrats’ power—a core conservative principle—his appointment tests whether the Fed can maintain necessary independence from executive pressure. A Justice Department criminal probe into Powell and a pending Supreme Court case on Fed independence intensify this debate. Conservatives rightly demand accountability for the Fed’s mission creep beyond price stability, yet must ensure reforms don’t replace one form of overreach with political meddling that could destabilize markets and harm long-term economic freedom. Warsh’s track record suggests he understands this balance, but Senate confirmation will scrutinize his commitment to principled independence.
Sources:
Trump to Nominate Kevin Warsh as Fed Chair – Axios
Trump nominates Kevin Warsh to succeed Jerome Powell as Federal Reserve chair – Fox Business
