Trump nominates Kevin Warsh to lead Fed

Washington. US President Donald Trump has nominated Kevin Warsh, a former governor of the Federal Reserve (Fed), to lead the US central bank when Jerome Powell’s term ends in May.

“I have known Kevin for a long time, and I have no doubt that he will become one of the great Fed chairs, perhaps the best,” Trump wrote on his Truth Social platform.

Since his return to the presidency a year ago, Trump has clashed harshly with Powell, demanding that the interest rate be reduced. At its meeting this week, the Fed opted to keep rates unchanged in a range of between 3.50 and 3.75 percent.

The Fed has two mandates: keep inflation at bay and seek full employment, and its action tool par excellence is interest rate levels.

Later, Trump said that his nominee to head the Fed is convinced of the need to reduce interest rates in the United States. “He certainly wants to cut rates. I’ve been watching that for a long time,” Trump declared at the White House.

In his first term, Trump considered Warsh for the Fed presidency – replacing Janet Yellen – but ultimately opted for Powell.

Profile

The Fed has long been considered a stabilizing force in global financial markets, due in large part to its apparent independence from politics. As Trump continues to call for lower interest rates to boost the economy, all eyes will be on how his nominee will defend central bank independence.

Warsh, a New York native, has recently stepped up his criticism of the Fed and backed Trump’s positions.

Warsh was Fed governor from 2006 to 2011; economic policy advisor to former President George W. Bush and also worked as a mergers and acquisitions banker at Morgan Stanley.

Warsh’s appointment must be confirmed by the Senate, by a simple majority.