WASHINGTON — President Donald Trump on Friday announced the nomination of former Federal Reserve governor Kevin Warsh to succeed Jerome Powell as chair of the U.S. central bank, bringing an end to a five-month selection process that unfolded amid unusual political pressure and mounting questions about the Fed’s independence.
Trump made the announcement on Truth Social, praising Warsh as a steady and proven hand.
President Donald J. Trump announces the nomination of Kevin Warsh to be the CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE. pic.twitter.com/ZENG1ytVFD
— The White House (@WhiteHouse) January 30, 2026
“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 wrote.
Warsh, 55, is a familiar figure to markets. He served as a Federal Reserve governor from 2006 to 2011, spanning the global financial crisis, and has since remained a prominent voice on monetary policy and financial regulation. His background, analysts say, may help reassure investors at a time when the central bank faces economic and political crosscurrents.
A Pick Markets Can Live With
Market reaction to the nomination was muted, reflecting confidence that Warsh is unlikely to act as a rubber stamp for White House demands despite Trump’s public pressure on the Fed.
“He has the respect and credibility of the financial markets,” said David Bahnsen, chief investment officer of The Bahnsen Group, speaking on CNBC’s Squawk Box. “There was no person who was going to get this job who wasn’t going to be cutting rates in the short term. But longer term, he will be a credible candidate.”
That credibility may prove essential as the Fed navigates slowing economic growth, stubborn inflation pressures and rising federal borrowing.
Years of Tension Between Trump and Powell
Trump’s decision follows years of open conflict with Powell, whom Trump himself appointed during his first term in 2018. Almost from the start, Trump criticized Powell for what he viewed as overly tight monetary policy, repeatedly urging aggressive interest rate cuts.
Even after the Fed delivered three consecutive rate reductions in late 2025, Trump continued his attacks, faulting Powell for resisting deeper cuts and for cost overruns tied to a massive renovation of the Fed’s Washington, D.C., headquarters.
The tension escalated further when the Justice Department subpoenaed Powell over the construction project. In a rare public rebuke, Powell called the move a “pretext” designed to pressure the Fed into easing policy in line with Trump’s wishes.
Warsh’s Call for ‘Regime Change’ at the Fed
Warsh has not shied away from criticizing the central bank himself. In a CNBC interview last summer, he called for what he described as “regime change” at the Fed.
“The credibility deficit lies with the incumbents that are at the Fed, in my view,” Warsh said at the time.
That stance could put him at odds with an institution that traditionally relies on internal consensus to set policy — and may complicate relationships with sitting governors if confirmed.
A Critical Moment for the Federal Reserve
The nomination comes at one of the most precarious moments for the Fed in decades. Inflation has eased but remains above the central bank’s 2% target. Meanwhile, the labor market has cooled, with hiring slowing into what economists describe as a “no-fire, no-hire” environment.
At the same time, political scrutiny of the Fed has intensified. Trump and senior administration officials have floated proposals that would significantly alter how the central bank operates, including increased White House oversight and requiring the Fed chair to consult with the president before making interest rate decisions.
Such ideas have fueled concerns that the Fed’s long-standing independence — a cornerstone of U.S. monetary credibility — could be weakened.
A Competitive and Contentious Selection Process
Warsh emerged from a crowded and competitive field that initially included 11 candidates, ranging from current and former Fed officials to prominent economists and Wall Street executives. The process was overseen by Treasury Secretary Scott Bessent, with the shortlist eventually narrowed to four finalists.
Trump hinted last week in a CNBC interview that he had settled on his choice, setting the stage for Friday’s announcement.
A Tough Road Ahead in the Senate
Confirmation is far from guaranteed. Republican Sen. Thom Tillis of North Carolina has said he intends to block any Fed nominees until the Justice Department’s investigation into the central bank’s renovation project concludes.
Beyond the politics, Warsh would inherit a Fed constrained by economic uncertainty. Markets currently expect limited near-term action: Traders are pricing in no more than two additional rate cuts this year, with the benchmark federal funds rate expected to settle near 3% — a level policymakers view as neither stimulating nor restraining growth.
What Happens to Powell?
One unresolved question is Powell’s future role. While Fed chairs typically resign their board seats after being removed as chair, Powell still has two years remaining in his term as a governor.
He could choose to stay on, potentially serving as a counterweight to efforts to reshape the Fed’s independence from within. The Supreme Court is already weighing a separate case involving Trump’s attempt to remove Governor Lisa Cook — a decision that could redefine presidential authority over the Federal Reserve’s board.
For now, Warsh’s nomination marks a pivotal moment for the central bank, setting the stage for a high-stakes confirmation fight and a new chapter in the long-running struggle over the Fed’s role — and its freedom — in shaping the U.S. economy.
