Who is Kevin Warsh? Trump’s pick to lead the Federal Reserve
In his first job at the Federal Reserve, Kevin Warsh arrived at a central bank being asked to save the world. Now he returns under very different circumstances and is asked to serve an unstable president who will make important but very different demands on him.
Warsh is indeed a veteran Fed; He served during the critical period between 2006 and 2011 that led to, and ultimately led to, the global financial crisis and the central bank’s efforts to stabilize the economy. Appointed by President George W. Bush, Warsh was one of the youngest members to serve on the board.
While at the Fed, Warsh played a key role in designing and implementing emergency lending programs aimed at stabilizing credit markets. Warsh also played a key role in developing numerous programs aimed at saving the economy. One of these programs, developed separately at the Treasury Department, became known as the Troubled Asset Relief Program, developed by Neel Kashkari, now president of the Minneapolis Fed.
But Warsh emerged from that period as a Fed critic.
He warned that large-scale asset purchases and near-zero benchmark interest rates risk disrupting markets and undermining long-term price stability. While Warsh supported previous efforts, he voted against the Fed’s second round of bond buying, a program known as quantitative easing.
Kevin Warsh, former chairman of the U.S. Federal Reserve, during the International Monetary Fund (IMF) and World Bank Spring meetings at IMF headquarters in Washington, DC, United States, Friday, April 25, 2025.
Tierney L. Cross | Bloomberg | Getty Images
‘Central casting’
Warsh also criticized the Fed for going too far in stimulating monetary policy after the financial crisis, arguing that it helped sow hopes for new crises. In some ways the President Donald Trump appointed a Fed chairman who is less apt to adapt to political pressure than Jerome Powell.
Trump cited Warsh’s extensive background when announcing his appointment to the Fed’s top job Friday morning. Warsh is currently a distinguished visiting scholar at Stanford University.
“Above all, he is the ‘central player’ and will never let you down.” the president sent at Truth Social.
Warsh is a Stanford University graduate who earned her law degree from Harvard and eventually married into the Lauder cosmetics family. Before joining the Fed, he worked in investment banking at Morgan Stanley and served as special assistant to the president for economic policy in George W. Bush’s White House.
While Warsh has positioned himself as a defender of the Fed’s independence, he has also criticized it for mission drift and told CNBC in an interview last year that the central bank needs “regime change.”
Warsh expressed concerns about the current Fed.
“The credibility gap, in my view, is due to incumbent officials at the Fed,” he said in a July interview. It’s a position that could put him in a competing role in an institution where building consensus is key to implementing policy.
Despite many policymaking missteps, Chairman Powell has largely managed to hold the Fed consensus together. However, in recent months this situation has been disrupted; At each of the past meetings, at least one, and sometimes more than one, dissenting opinion has emerged.
Warsh’s appointment would mark a sharp philosophical shift from Powell’s pragmatic, consensus-based approach and a potential tightening of the Fed’s tolerance for inflation and balance sheet expansion. He will fill the seat currently occupied by Stephen Miran, whose term expires on Saturday.
Miran told CNBC on Friday that he supports the election.
“Presidential candidate Warsh has a long history of being an innovative and original thinker on monetary policy,” Miran said. “He has a lot of important insights over the years, and I’m really excited to see all the good work he’ll do at the Fed.”
Could Warsh influence the Fed committee?
But Trump may be in for an unpleasant surprise if he thinks Warsh can easily deliver aggressive rate cuts. Several voting members of the Federal Open Market Committee have expressed resistance to further rate cuts until there is more evidence that inflation is moving firmly toward the central bank’s 2 percent inflation target.
Moreover, in December, all Fed officials stated that they expected another interest rate cut in 2026, followed by another interest rate cut in 2027. Altogether, this is in line with market expectations; Futures traders are pricing in two interest rate cuts this year and none next year.
But traditionally the president is first among equals when it comes to voting for the FOMC, so Warsh could sway the group at least slightly in a more dovish direction.
“We view Warsh as a pragmatist, not an ideological hawk in the tradition of independent conservative central bankers,” Krishna Guha, head of global policy and central bank strategy at Evercore ISI, wrote in a note. he said. “Because he has a hawkish reputation and is seen as an independent, he is in a better position than some of his rivals to bring the FOMC along to make at least two and possibly three cuts this year.”
So even if Warsh proves to be an ideological ally of the administration, how that will translate into action will be an important question.
“Analytically speaking, we expect him to be strongly aligned with the Administration’s arguments that increased productivity will allow for neutral or harmonious rates with strong growth,” wrote Tobin Marcus, head of U.S. politics and policy at Wolfe Research. “But it all depends on how the data comes in, as we expect the rest of the FOMC to stick to the data and focus on the strong Fed models that Warsh criticized.”
Warsh emerged from a competitive derby that included 11 candidates, a host of past and current Fed officials, leading economists and several Wall Street investment professionals, including BlackRock fixed income chief Rick Rieder. This field was reduced to five, then four, before Warsh emerged as the choice.
Trump has made no secret of the most important criterion: his desire to lower interest rates and keep them low. The president has expressed the importance of low interest rates as a way to both help the moribund U.S. housing market and lower the costs of financing the $37 trillion U.S. debt.
Before all this, it will have to be approved by the Senate, at a time when the political situation is tense.
The Trump Justice Department is investigating the massive renovation project at the Fed’s Washington, D.C. headquarters and has issued a subpoena to Powell seeking information. Republican Sen. Thom Tillis of North Carolina has vowed to block Trump Fed nominees until this situation is resolved.
Once that hurdle is cleared, Warsh will face a full Senate in which Republicans still have a majority.
“Warsh’s pick is likely to have broad support — Democratic economist Jason Furman is ahead early — and should be relatively easy to confirm in the Senate,” Guha said.
