Trump taps ex-investment banker Warsh to be next Fed chair

• Key Insight: President Trump’s selection of former Fed Gov. Kevin Warsh to a vacating seat on the central bank board will likely garner broad support from Senate Republicans, but promised opposition from Sen. Thom Tillis, R-N.C., could slow the confirmation process.  
• Expert Quote: “I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best.” — President Donald Trump.
• Forward Look: If confirmed, Kevin Warsh will be expected to champion the president’s vision of a lower interest rate environment.

President Donald Trump selected Kevin Warsh, a former Federal Reserve governor, to lead the central bank when Chair Jerome Powell’s term ends in May, ending months of speculation over the matter.

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Trump made the announcement in the early hours of Friday morning in a social media post describing Warsh’s background and resume. Trump added that he is confident that Warsh will succeed in his new role. 

“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best,” Trump said in a social media post Friday morning. “On top of everything else, he is ‘central casting,’ and he will never let you down. Congratulations Kevin!”

If confirmed, Warsh is expected to champion the president’s vision for a lower interest rate environment.

Warsh served on the Fed’s board of governors from 2006 to 2011 during the Bush and Obama administrations, making him, at 35, the youngest confirmed member of the board in its history. Prior to his service on the central bank, Warsh served in George W. Bush’s National Economic Council and worked as an investment Banker at Morgan Stanley. Warsh is a scholar and lecturer at the Stanford Graduate School of Business and a senior fellow at the Hoover Institution. 

Warsh’s path to confirmation is not as straightforward as it could have been. Earlier this month, when Fed Chair Jerome Powell disclosed that he was under investigation by the Justice Department over his testimony last year regarding ongoing renovations at the Fed headquarters in Washington, Sen. Thom Tillis, R-N.C., said he would not vote for Trump’s nominee to replace outgoing Fed Gov. Stephen Miran “until this legal matter is fully resolved.” 

Ian Katz, managing partner with Capital Alpha, said in a research note Friday morning that Tillis’ opposition on the Senate Banking Committee may or may not stall the nomination depending on whether any other Republican members hold similar qualms about Warsh or the White House’s approach to the Fed more generally.

“The committee has 13 Republicans and 11 Democrats,” Katz said. “It’s not clear yet whether Tillis’ vote will be needed to advance Warsh’s nomination, but it might be. We believe that Warsh will get little to no Democratic support.”

Senate Banking Committee Chair Tim Scott, R-S.C., praised Warsh’s selection, noting that his prior experience on the Fed board gives him “deep knowledge of markets and monetary policy that will be essential in this role.” 

“Federal Reserve independence remains paramount, and I am confident Kevin will work to instill confidence and credibility in the Fed’s monetary policy,” Scott said. “As Chairman of the Senate Banking Committee, I look forward to leading a thoughtful, timely confirmation process that carefully examines his vision for focusing the Federal Reserve on its core mission.”

Senate Banking Committee ranking member Elizabeth Warren, D-Mass., condemned Warsh’s nomination as yet another effort by the Trump administration to erode the independence of the central bank.

“Donald Trump said anybody who disagrees with him will never be Fed Chairman. Former Fed Governor Kevin Warsh — who cared more about helping Wall Street after the 2008 crash than millions of unemployed Americans — has apparently passed the loyalty test,” Warren said. “No Republican purporting to care about Fed independence should agree to move forward with this nomination until Trump drops his witch hunts of the current Chairman of the Federal Reserve and Governor Lisa Cook.”

Jaret Seiberg, managing director at TD Cowen, said in a Friday analyst note that if Tillis drops his opposition, Warsh will likely be confirmed as chair, likely sometime in April.

“Our expectation is that the Senate will confirm Warsh as chair. We believe there could be a Senate Banking hearing in March with the full Senate voting by mid-April,” Seiberg said. “If the vote is partisan, then it will be because Democrats are objecting for political reasons rather than because they oppose Warsh. This assumes Sen. Tillis drops his block on Fed picks, which is tied to the DOJ investigation of Powell.”

Since taking office, Trump has argued the Federal Reserve should aggressively cut interest rates to stimulate the economy. The central bank’s reluctance, citing inflation concerns, has put it and its leadership in the president’s crosshairs.

Trump has repeatedly criticized Fed Chair Jerome Powell, calling him “Mr. Too Late,” and has sought to remove Fed Gov. Lisa Cook over unproven claims of mortgage fraud.

Near the second half of 2025, the central bank moved to cut short term interest rates by 75 basis points, lowering the federal funds rate to between 3.5% to 3.75% to prop up the labor market. The move, however, did little to ease the president’s dissatisfaction with the central bank’s monetary policy.

In mid-January, the Justice Department served the Fed with grand jury subpoenas that Powell said threatened criminal indictment over his testimony last June regarding renovations at Federal Reserve headquarters. Powell suggested the action was intended to pressure the central bank into further rate cuts.

Powell has been repeatedly asked whether he intends to step down from the Fed board when his term as chair expires, which almost all Fed chairs have done in the past. Powell has declined to expound on his plans for when his chairmanship expires, but observers have noted that he will likely wait for his successor to be confirmed before deciding to step down. Seiberg said Warsh’s selection as Powell’s successor makes it likely that Powell will ultimately step down.

“We continue to expect that Powell will resign as a Fed governor when his term as chair expires on May 15,” Seiberg said. “Trump nominating Warsh strengthens our conviction as Warsh is a traditional pick with a history of working with the Fed board and the broader [Federal Open Market Committee].”

During a news conference following the FOMC meeting in January, Powell offered advice to his eventual successor, urging the next Fed chair to avoid political entanglements.

He said the Fed’s obligation is to engage with Congress and the public to maintain democratic legitimacy. “If you want democratic legitimacy, you earn it by your interaction with our elected overseers,” Powell said.

“Don’t get pulled into elected politics,” Powell warned. “Don’t do it.”