U.S. President Donald Trump has nominated Kevin Warsh to become the new chair of the Federal Reserve, America’s central bank.
If approved by Congress, Warsh will succeed current Fed Chair Jerome Powell when his term expires this May.
The nomination of Warsh ends months of speculation about who Trump would nominate to lead the central bank.
The nomination also comes with the independence of the central bank in question after Trump ratcheted up pressure on Powell to lower interest rates and boost the U.S. economy.
Trump has gone so far as to try and fire one Fed governor, Lisa Cook, and launch a criminal investigation into Powell over renovations being undertaken at the U.S. Federal Reserve.
“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,” wrote Trump on social media.
The pick of Warsh, age 55, isn’t roiling financial markets, likely because he has past experience with the central bank and Wall Street views him as at least somewhat independent from Trump.
However, Warsh has campaigned for the Fed chair role in recent months and aligned himself with Trump in interviews, going so far as to call for “regime change” at the central bank.
Warsh will take over as Fed chair at a time when inflation remains above the central bank’s 2% target, the government deficit is rising, and political pressure is at an all-time high.
Trump has even floated the idea that the new Fed chair consult with him on interest rate decisions.
For now, financial markets don’t expect much from the new chair.
Futures markets are pricing in at most two interest cuts this year, which would lower the trendsetting Fed Funds Rate to 3%.
Educated at Harvard and Stanford universities, Warsh previously served as a member of the Federal Reserve Board of Governors from 2006 to 2011.
Warsh has spent most of his career in academia after starting out on Wall Street. From 1995 to 2002, Warsh worked at Morgan Stanley (MS) in their mergers and acquisitions department.
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