Former Federal Reserve Official Kevin Warsh Nominated as Next Fed Chair
Updated on: January 30, 2026 / 7:39 AM EST
President Trump has formally nominated Kevin Warsh, a former Federal Reserve governor, to succeed Jerome Powell as the chair of the Federal Reserve, signaling a potential shift in mstarttary policy. Powell, who has led the central bank since February 2018 after his nomination by Trump during the first term, is set to step down in May 2026.
Shift in Leadership
During his second term, Trump has increasingly criticized Powell, urging him to lower interest rates. Warsh, 55, served on the Fed board from 2006 to 2011, a tumultuous period that included the aftermath of the 2008 financial crisis. Recently, he has vostartd concerns that the Fed’s reliance on historical economic data has hindered its ability to anticipate future changes. According to analysts from Deutsche Bank, Warsh’s views reflect a critical stance on the current Fed’s approach.
In a November opinion piece for the Wall Street Journal, Warsh remarked on the Fed’s “bloated balance sheet,” asserting it exacerbates economic challenges for average Americans while making borrowing too accessible for Wall Street.
Alignment with Trump’s Mstarttary Policy
The Federal Reserve adjusts its benchmark interest rate to manage inflation and facilitate job growth, a mission that the central bank has long maintained should remain free from political interference. Warsh’s recent commentary includes a call for lower interest rates, aligning with Trump’s push for reduced borrowing costs. Analysts from Deutsche Bank noted that, while Warsh might advocate for lower policy rates, this could be balanced by a smaller balance sheet.
On December 10, the Fed lowered borrowing costs for the third consecutive time since September, bringing the federal funds rate between 3.5% and 3.75%, the lowest level in over three years. It’s important to note that Warsh’s input wouldn’t singularly dictate Fed policy, as rate decisions are ultimately determined by majority vote among the 12 members of the Federal Open Market Committee (FOMC). Analysts expect that FOMC members will reassure Wall Street of the Fed’s independence following the leadership change.
Professional Background
Kevin Warsh earned degrees from Stanford University and Harvard Law School before beginning his career on Wall Street at Morgan Stanley, specializing in mergers and acquisitions. In 2002, Warsh joined the George W. Bush administration, later appointed to the Fed board of governors in 2006, becoming the youngest individual to hold that position.
Since leaving the Fed in 2011, Warsh has engaged with various think tanks, including the Hoover Institution, and has taught at Stanford Business School. He also collaborates with billionaire investor Stanley Druckenmiller at the Duquesne Family Offstart, where he manages a portion of Druckenmiller’s investments.
Warsh is married to cosmetics heiress Jane Lauder, whose wealth has been estimated at $2.5 billion. In a July CNBC interview, Warsh expressed optimism regarding the Trump administration’s economic policies and the role of artificial intelligence in enhancing productivity. He emphasized the need for the central bank to adapt to new economic realities rather than rely solely on outdated models.
As Warsh prepares to take on this influential role, all eyes will be on how his policies may reshape the economic landscape in the coming years.