White House official confirms to me now that Warsh would replace Fed's Miran - Politico Reporter on X

White House official confirms to me now that Warsh would replace Fed's Miran - Politico Reporter on X

Trump Nominates Kevin Warsh for Fed Chair, Replacing Miran
President Donald Trump has formally nominated Kevin Warsh to serve as the next Federal Reserve chair, with the former Fed governor set to replace Stephen Miran, a Trump-appointed Fed governor, before assuming the chair role from Jerome Powell in May. The nomination, confirmed by a White House official, marks a strategic shift in central bank leadership, aligning with Trump's longstanding criticism of Powell's monetary policy.

Warsh, a former Fed governor from 2006 to 2011, has recently advocated for lower interest rates, citing potential productivity gains from artificial intelligence. However, his nomination faces hurdles in the Senate. Republican Senator Thom Tillis has pledged to block the confirmation until a Justice Department investigation into Powell's testimony on Fed building renovations is resolved, raising questions about the timeline for confirmation hearings.

Warsh's record as a "hawk"—prioritizing inflation control over aggressive rate cuts— contrasts with Trump's demands for rapid reductions in borrowing costs. While Warsh has expressed support for Trump's deregulatory agenda, economists note his past opposition to accommodative policies during the 2008 financial crisis and his recent calls for Fed "regime change" could complicate efforts to implement rate cuts.

Financial markets initially reacted with volatility, with gold and silver prices plummeting amid speculation about a more "conventional" Fed leader, though the dollar stabilized slightly. The Fed's rate-setting committee, which includes 12 voting members, remains divided on inflation and employment trends, potentially limiting Warsh's ability to push for swift cuts.

The nomination underscores concerns about the Fed's independence, with critics like Senator Elizabeth Warren accusing Trump of politicizing the central bank. If confirmed, Warsh would inherit a Fed navigating persistent inflation, a resilient labor market, and geopolitical risks such as the Iran conflict, which has driven oil prices higher.

For now, the path to confirmation remains uncertain, with Tillis' hold and broader economic uncertainties shaping the outlook for U.S. monetary policy.