President Donald Trump on Friday nominated Kevin Warsh to be the new chairman of the Federal Reserve, but this conservative economist and financier hasn’t always been in agreement with the president’s desire to lower interest rates despite high inflation.
When Warsh served on the Fed’s Board of Governors from 2006 to 2011, he often warned that cutting interest rates could have the opposite effect that Trump is hoping for, saying cuts could actually drive up consumer prices.
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“Even if the economy were to weaken somewhat further, we should be inclined to resist expected, reflexive calls to trot out the hammer again,” he said during the financial crisis in May 2008, referring to potential rate cuts.
Since coming under consideration for the Fed chair position, however, his stance has shifted. Warsh, 55, has recently shown support for Trump and criticized the current Fed board and its chairman, Jerome Powell, whose term ends in May.
Powell’s reluctance to cut borrowing rates while inflation remains stubbornly high put him at odds with Trump and, he says, made him a target of a federal criminal investigation.
Now, Trump is looking to move on. He announced Warsh’s nomination in a Truth Social post Friday.
“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. “On top of everything else, he is ‘central casting,’ and he will never let you down.”
Warsh’s appointment will have to be confirmed by the Senate.
Who is Kevin Warsh?
When President George W. Bush nominated Warsh in 2006, he became the youngest-ever Fed governor.
Prior to serving on the board, Warsh worked in mergers and acquisitions at Morgan Stanley & Co in New York. There, he focused on financial strategy.
Later he served as special assistant to the President for economic policy and as executive secretary of the National Economic Council under Bush.
In those positions, he advised the president and administration on issues related to fund flows in the capital markets, securities, banking and insurance issues.
Warsh’s stances
During Warsh’s tenure as a governor, he oversaw some of the Fed’s administrative duties and sat on the board during the 2008 financial crisis.
He was adamant about using emergency tools when the economy is in crisis, but insisted they should be used only briefly.
He expressed fears that keeping rates low for too long could encourage excessive risk-taking and lead to higher inflation down the line.
He’s faced criticism from politicians who, most recently, claim he focused more on making money for Wall Street than on helping the American people during the economic crash.
That stance sets him apart from Powell, who generally supports adjusting rates until employment and the economy rebound.
Also differing from Powell, Warsh supports quantitative easing, or creating new money to purchase long-term securities like bonds, only in emergencies. He warned that quantitative easing blurs the line between monetary and fiscal policy.
In July 2025, Warsh criticized the current Fed board.
“We need regime change in the conduct of policy,” he said. “The credibility deficit lies with the incumbents that are at the Fed, in my view.”
He also sided with Trump, who has pushed the Fed to aggressively cut rates and blamed the central bank for not responding quicker to skyrocketing inflation during the COVID-19 pandemic.
“Their hesitancy to cut rates, I think, is actually … quite a mark against them,” Warsh said. “The specter of the miss they made on inflation, it has stuck with them. So one of the reasons why the president, I think, is right to be pushing the Fed publicly is we need regime change in the conduct of policy.”
Powell and Trump
Trump appointed Powell in 2018, but the two have clashed since the start of Trump’s second term, with Powell resisting White House pressure to cut interest rates.
Earlier this month, Powell confirmed that federal prosecutors have launched a criminal investigation into him. The investigation followed intense pressure by Trump for the Fed to institute sharp interest rate cuts — pressure that many of Trump’s critics say threatened the central bank’s historic independence.
Since the news of the investigation, lawmakers from both sides of the aisle have spoken out against the move, again acknowledging concerns that moves from the administration could threaten the Fed’s independence.
Those concerns could make it Warsh’s confirmation by the Senate more difficult.
