Who is candidate for Fed Chairman Kevin Warsh?

On January 30, US President Donald Trump nominated former Fed Governor Kevin Warsh, 56 years old, to be the next Chairman of the US Federal Reserve (Fed), after Jerome Powell’s term expires in May.

Mr. Trump commented that Mr. Warsh is a classic model of what people imagine in the position of Fed Chairman, from background to appearance.

“He’s very smart, good, strong, young, quite young,” the President commented on Friday. “Appearance is not important but he also has the right look,” he added.

Mr. Kevin Warsh graduated from Stanford University and Harvard Law School. At age 35, he became the youngest governor on the Fed’s seven-member Board of Governors, holding the position from 2006 to 2011.

Previously, he served as Vice President and Director of Mergers and Acquisitions (M&A) at Morgan Stanley Bank, Special Assistant to President George W. Bush on economic policy and held the role of secretary at the National Economic Council.

During 2008-2009, Warsh worked closely with then-Fed Chairman Ben Bernanke in an effort to respond to the financial crisis. Commenting in his memoirs, Mr. Bernanke assessed Warsh as “one of his closest advisors and confidants”. Warsh’s ability to understand politics and markets, along with his extensive network of contacts on Wall Street, are said to be “extremely valuable.”

But at several key moments, Mr. Warsh appeared to underestimate the severity of the challenges facing the U.S. economy, as mortgage defaults and layoffs increased during the Great Recession.

At that time, he wanted the Fed to keep interest rates at a higher level, even when the economy faced the risk of deflation and possible collapse. In 2008, Warsh expressed concern that the Fed’s continued interest rate cuts could stimulate inflation. However, even after the Fed lowered interest rates to near zero, inflation remained low.

By 2011, in meetings, he opposed the Fed’s decision to buy $600 billion in Treasury bonds as a measure to lower long-term interest rates, although in the end he still voted in favor of Bernanke’s proposal. In 2017, Warsh was the runner-up candidate for the position of Fed Chairman, when Mr. Trump finally chose Mr. Jerome Powell.

Currently, Mr. Warsh is an economic researcher at the Hoover Institution – a policy consulting organization at Stanford University. He is also a lecturer at the Stanford Graduate School of Business and a partner at Duquesne Family Office, the wealth management unit of billionaire investor Stanley Druckenmiller.

In recent months, Mr. Warsh has actively campaigned to win the position of Fed Chairman in the media. Once a Republican who supported free trade, he now supports President Trump’s economic policies.

In the comment above The Wall Street Journal In November 2025, Warsh said that the Fed “should abandon the view that inflation occurs when the economy grows too much and workers are paid too much.”

According to him, inflation occurs when the government spends too much and prints too much money. At the same time, it suggests that inflationary pressures will ease as technologies such as artificial intelligence (AI) will lead to higher productivity. “AI will be a significant deflationary force, increasing productivity and strengthening US competitiveness,” Warsh wrote. This view is very consistent with Mr. Trump’s beliefs.

In recent speeches and comments, he expressed support for the view of reducing interest rates. Previously, in December, the President wrote on social networks about the need to reduce borrowing costs and said: “Anyone who disagrees with me will never become Fed chairman!”.

Mr. Warsh also criticized the Fed more harshly, saying the agency’s policy “has been broken for quite some time.” “The central bank today is very different from when I joined in 2006,” Warsh said. According to him, letting inflation skyrocket in the 2021–2022 period is “the biggest mistake in macroeconomic policy in 45 years, dividing the country”.

And while Mr. Trump attacked Chairman Powell for not reducing interest rates, Warsh objected from the perspective of participating in issues such as climate change, diversity, equity, and inclusion – areas he believed were beyond the Fed’s mandate.

The appointment of Mr. Kevin Warsh needs to be approved by the Senate. If everything goes well, observers believe that the new Fed Chairman will be subject to close scrutiny from the financial markets and parliament. Because he was appointed by a president who has continuously asked for interest rates to be much lower than what economists consider reasonable under current economic conditions.

Additionally, the Fed Chairman is just one member of the 19-person committee, with 12 of those officials voting on each interest rate decision. The committee is divided between those concerned about persistent inflation, who want to leave interest rates unchanged, and those who say the recent rise in the unemployment rate shows the economy is struggling and needs lower interest rates to boost employment.

Financial markets may also react. If the Fed cuts short-term interest rates too sharply and is seen as acting for political reasons, Wall Street investors could sell Treasury bonds out of fear that inflation will rise. The sell-off would push up long-term interest rates, including mortgage rates, causing the opposite effect.

In addition, whether Mr. Warsh can maintain the Fed’s independence from day-to-day politics while still pleasing Mr. Trump will be a huge challenge. However, his former associates and friends believe that Warsh has the intellectual capacity and good communication skills to be able to take on this position.

His family has a relationship with Mr. Trump, helping to reduce pressure from the White House. Warsh is the husband of Jane Lauder, daughter of cosmetics billionaire Ronald Lauder, a major Republican donor.

Raghuram Rajan, professor of economics at the University of Chicago and former chairman of India’s central bank, said Warsh has “the cautious temperament, deep understanding and diplomatic talent necessary to lead a challenging position at this time”.

However, some obstacles are emerging. In the Senate, Senator Thom Tillis announced that he would oppose Mr. Warsh’s nomination until the Department of Justice’s investigation of Mr. Powell is resolved.

According to Mr. Tillis, Warsh is a “qualified candidate” but emphasized that “protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.” Asked whether Mr. Warsh could be confirmed without Mr. Tillis’ support, Senate Majority Leader John Thune said “probably not.”

More harshly, Democratic Senator Elizabeth Warren accused Mr. Warsh of changing his views to please Mr. Trump before being nominated. “I don’t know how to explain it, except to say that’s exactly what a puppet is doing,” she commented.