Trump Nominates Kevin Warsh to Replace Jerome Powell at Fed

President Donald Trump ended the suspense surrounding the nation's central bank on Friday when he nominated Kevin Warsh to replace Jerome Powell as the chairman of the Federal Reserve. Here is a look at Warsh, his economic policies, and what is next in the confirmation process.

Trump Nominates Kevin Warsh to Replace Jerome Powell

President Trump announced that he was nominating Warsh to serve as the chair of the Fed through a post on Truth Social on Friday morning. The president used time with reporters in the Oval Office later in the day to tout his pick, calling Warsh the "perfect candidate." Trump confirmed that the 55-year-old Warsh would be the youngest person to ever serve as chair, should he survive the confirmation process.

Warsh is a former Fed governor who had also been considered to serve as U.S. Treasury secretary last year. He was appointed to serve in the Fed at the age of 35, making him the youngest person in history to serve on this board.

The confirmation process is not likely to be without controversy, as Warsh is not widely supported on both sides of the aisle. While Warsh had been previously described as an inflation hawk, he now reportedly favors lower interest rates. In line with much of the Trump administration's desire to shrink the government, Warsh has also recommended overhauling the central bank's staffing.

The executive office has traditionally been charged with selecting the Fed chair. This cycle's nomination is even more important given the current state of the economy. Trump has made it one of his primary domestic goals to bring down the cost of living. He needs the Fed to cooperate by working to maintain price stability.

Trump's disdain for Powell is not a secret. The president has spent the last year criticizing the bank's leader for being more aggressive with interest rate cuts. Powell released a video statement recently revealing that the Trump administration has launched a criminal investigation against him, calling it a move designed to intimidate him into lowering interest rates.

While it is not clear if Trump has the legal authority to fire a Fed chair, his administration is currently presenting a case to the Supreme Court that it should be able to remove Fed Governor Lisa Cook. The outcome of this case could have major implications for the sovereignty of the Fed, an agency that is supposed to be free of political influence.

The White House had considered about one dozen candidates for the coveted nomination. According to Treasury Secretary Scott Bessent, those under consideration included former Treasury Secretary Janet Yellen, Fed Governor Christoper Waller, National Economic Council (NEC) Director Kevin Hassett, and BlackRock's Rick Rieder.

What is Next in the Confirmation Process for Warsh

The road to confirmation is not likely to be easy for Warsh. The Senate Banking Committee will consider the nomination in the format of a public hearing. From there, the entire Senate chamber will need to vote whether or not to send Warsh to the job.

Democratic leaders are already raising concerns about how Warsh's nomination relates to the current strife between the Fed and the White House.  Sen. Elizabeth Warren, a Democratic member of the committee, released a statement on Friday saying that the GOP should not move forward with Warsh's nomination until Trump drops his "witch hunts of the current Chairman of the Federal Reserve and Governor Lisa Cook."

The continual efforts of the White House to politicize the monetary decisions made by the Fed have begun to erode the thinking that the central bank is an independent entity in Washington, D.C. As such, members of the Senate Banking Committee will likely hold Warsh's feet to the fire about his fluid views on interest rates. Democrats on the committee are also predicted to grill Warsh about any potential deals he made with Trump about Fed policies.

Warsh's Work Experience and Personal Life

Warsh is no stranger to the political landscape of the nation's capital. He previously served in the George W. Bush administration, working as a White House economist. Warsh is currently a visiting fellow at the Hoover Institution, a conservative think tank based at Stanford University.

When working as a Fed governor, Warsh served alongside former Fed Chair Ben Bernanke to manage the Great Financial Crisis in 2007 and 2008. His work in this role earned him a reputation as a rising star at the Fed.

A graduate of Stanford, Warsh married cosmetics billionaire heiress and businesswoman Jane Lauder in 2002. Lauder is the granddaughter of Estée Lauder and the daughter of Republican mega-donor Ronald Lauder.  Look to the Democrats to use this connection as further reason to put Warsh's intentions under the microscope.

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