Key Points
- Trump says he will nominate Kevin Warsh to replace Jerome Powell in mid-May 2026.
- The Fed is holding rates at 3.5% to 3.75% after three 2025 cuts (Sep, Oct, Dec).
- A Justice Department probe into a Fed renovation could complicate confirmation.
Donald Trump says he plans to nominate Kevin Warsh as the next chair of the U.S. Federal Reserve, announcing the pick on Truth Social.
If confirmed by the Senate, Warsh would succeed Jerome Powell when Powell’s chair term ends in mid-May 2026. Trump passed over Warsh in 2017 in favor of Powell, then later criticized that choice.
Warsh, 55, served on the Fed’s Board of Governors from 2006 to 2011, and later became a prominent critic, calling for a “regime change.” He has also advised Trump on economic policy.
The Fed held its benchmark rate steady this week after three quarter-point cuts in 2025, in September, October, and December. The target range remains at 3.5% to 3.75%, still above the level Trump has pressed for.
Warsh’s record offers mixed signals. As a governor, he was cautious on inflation and often leaned toward tighter policy. In 2025, he argued publicly that rates could be significantly lower, and he has urged faster balance-sheet reduction as a way to support lower rates.
Even so, the chair cannot act alone. The Federal Open Market Committee sets rates by majority vote. The committee has 12 voting members: seven governors and five regional Fed presidents, with four of the regional votes rotating.
A separate controversy could shape the confirmation path. In early January, Powell said the Justice Department issued subpoenas tied to his 2025 congressional testimony on a major renovation project.
Reporting has put the cost increase around $1.9 billion to $2.5 billion. Powell delivered an unusual video statement condemning the investigation, and some lawmakers have floated delaying Fed nominations until the matter is settled.
For borrowers and investors, the stakes are direct. The Fed chair shapes the cost of credit, the dollar’s pull, and capital flows far beyond the United States.
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